By Ruben MeloyanThe Armenian economy has expanded at a double-digit rate for a sixth consecutive year, Trade and Economic Development Minister Karen Chshmaritian said on Tuesday.
According to government data released by Chshmaritian, Armenia’s Gross Domestic Product grew by 13.2 percent during the first eleven months of this year. The growth rate for the whole of 2006 is projected to hit at least 13.5 percent, he said.
President Robert Kocharian hailed the country’s strong macroeconomic performance as he met with some 60 leading Armenian businessmen late Monday. “It was one of the most productive years for our economy,” he said.
Kocharian admitted that the growth is largely driven by a continuing boom in the construction and services sectors. His government reported a nearly 40 percent surge in the volume of construction work carried out across Armenia during the first half of 2006.
By contrast, the local manufacturing sector has been largely stagnant, with government figures showing Armenian industrial output shrinking by 1.2 percent from January through November. Chshmaritian blamed that on a continuing downturn in the global trade in refined diamonds, one of Armenia’s main export items. He said Armenian exports excluding diamonds have increased by 6 percent.
“This shows that Armenia’s economy is becoming more diversified,” Chshmaritian told reporters. “A slump in one or two sectors does not cause a drastic fall in the overall indicators.” He also stressed the fact that small and medium-sized firms now generate more than 40 percent of GDP.
Armenia’s macroeconomic performance has repeatedly drawn praise from the International Monetary Fund and the World Bank. The IMF’s managing director, Rodrigo de Rato, described it as “impressive” during a June visit to Yerevan.
The Armenian government insists that despite growing income disparity the growth has benefited all segments of the country’s population. According to the National Statistical Service (NSS), 34.6 percent of Armenians lived below the official poverty line as of the beginning of 2005 -- down from 56 percent registered in 1999 and 43 percent in 2003.
Kocharian also spoke of a “visible” improvement of living standards, pointing to a 40 percent jump in sales of household goods and a 20 percent rise in the number of cars imported to Armenia in 2006. “This means that a middle class is really emerging and that a corresponding number of households are now somewhat better off,” he said.
Kocharian admitted at the same time that his government has yet to tackle “social polarization” and a widening development gap between Yerevan and other parts of Armenia.