The Armenian government has officially lowered its economic growth forecast for 2014 to 4 percent from 5 percent.
The government made the new growth projection in a mid-term spending program that was unveiled by Prime Minister Hovik Abrahamian at a cabinet meeting late last week. “I want to ask the ministries and other agencies to look into this very important document in detail,” he said.
The document forecasts that economic growth in Armenia will accelerate to 5 percent next year and 5.3 percent in 2016. It was unveiled less than two months after the Armenian parliament approved, in a vote of confidence, a three-year policy plan submitted by Abrahamian’s newly formed cabinet. It said that economic growth in the country will average 5 percent annually.
The International Monetary Fund cautioned in April, however, that the Armenian economy will expand by only 4.3 percent this year. Teresa Daban Sanchez, the IMF’s resident representative in Yerevan, said on May 23 that the fund is now revising this target downward primarily because of worsening economic conditions in Russia.
Armenia’s National Statistical Service recorded a year-on-year GDP increase of only 3.1 percent in the first quarter of this year.
Abrahamian stressed on July 3 that his government’s latest growth projections have been “agreed with” President Serzh Sarkisian. The latter famously declared in March 2013 that he will sack his governments if they fail to ensure 7 percent growth rates for the next few years.
Sarkisian said on May 26 that Armenia’s economy will grow faster than expected in 2014-2017. “I am convinced that with extra efforts the government will manage to achieve greater concrete results and ensure indicators considerably exceeding the set targets,” he stated at a congress of the ruling Republican Party of Armenia.
“The coming years will be a period of expanding economic opportunities and enhancing people’s welfare,” added the president.
Vahagn Khachatrian, an economist and senior member of the opposition Armenian National Congress (HAK), dismissed these promises on Monday. Khachatrian claimed that the lower growth rates anticipated by the government will not be enough to raise living standards and reduce poverty.