According to official statistics, the Armenian economy expanded by 2.6 percent last year following a more than 14 percent slump registered in 2009 because of the global recession.
Late last year, the government and the Central Bank forecast a growth rate of 4.6 percent for 2011. The International Monetary Fund and the World Bank made similar growth projections.
“I think that the economy -- and macroeconomic figures testify to that -- is not only recovering but moving forward,” Davtian told RFE/RL’s Armenian service. “We have quite promising results for the first four months.”
“Last year we had a GDP growth rate of 2.6 percent, whereas this year we expect a growth rate of about 5 percent,” he said.
Armenia -- Economy Minister Tigran Davtian.
Armenia’s National Statistical Service (NSS) has yet to release collated GDP data for the first quarter of this year. Its separate monthly indicators for various sectors of the economy suggest that growth was rather slow in this period. It was mainly fuelled by rising industrial output and modest gains in services and agricultural production. Retail sales, which were flat throughout 2010, also rose slightly.
The government expects a significant boost to the economy from an anticipated rebound in the agricultural sector, which contracted dramatically in 2010 due to poor weather. A more than 20 percent first-quarter surge in cash remittances from Armenians working abroad should also reflect positively on the country’s macroeconomic performance.
Government critics say the modest gains recorded by the NSS have been more than offset by rising consumer price inflation that has hit many Armenians hard. This means, they say, that living standards in Armenia have not improved since the authorities declared the end of the recession a year ago.
At 9 percent in May, inflation remains well above the maximum full-year rate of 5.5 percent targeted by the Armenian authorities. Davtian, who spoke during the inauguration of a new soft drinks plant in Yerevan, described this as “the biggest macroeconomic challenge” facing them.
The authorities insist that the higher-than-anticipated inflation is the result of increased international food and commodity prices as well as the 2010 slump in domestic agricultural output. They admit that a lack of competition in imports of key goods to Armenia has also been a factor.
Those imports are largely controlled by a handful of wealthy businessmen close to the government. The most successful of them, Samvel Aleksanian, on Wednesday denied arbitrarily raising the prices of sugar, wheat and other basic foodstuffs imported by his companies. He said inflation is high “all over the world.”
Speaking to RFE/RL’s Armenian service, Aleksanian said bread prices in Armenia will fall soon as a result of Russia’s decision to lift a ban on wheat exports imposed last year. “There is already change,” he claimed. “[Flour] will get even cheaper within a month. The people will feel that.”