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Armenia’s economy is on course to grow by 4.3 percent this year after stagnating in 2016, Finance Minister Vartan Aramian said on Monday.

The Armenian government had forecast an economic growth rate of 3.2 percent for 2017 in its budget proposal approved by parliament just over a year ago. According to official statistics, the country’s Gross Domestic Product beat that expectation in the first half of 2017, increasing by roughly 5 percent in real terms.

“Expert analysis shows that by the end of the year we will have faster growth than the 3.2 percent [rate] projected by the state budget,” Aramian told a news conference. “We expect a real growth rate of 4.3 percent this year.”

Data from the National Statistical Service (NSS) shows that first-half growth was driven in large measure by a nearly 13 percent rise industrial output. The NSS also reported a more than 5 percent increase in retail trade.

The Armenian economy expanded by only 0.2 percent in 2016 not least because of a downturn in agriculture which the government blamed on bad weather. The agricultural sector continued to contract in the first half of 2017 due to an unusually harsh winter and a summer drought.

In its five-year policy program approved by the National Assembly in June, Prime Minister Karen Karapetian’s cabinet pledged to ensure that economic growth in Armenia averages 5 percent annually. The government is supposed to meet this ambitious target by promoting exports and improving the domestic business environment.

Aramian also said on Monday that despite faster growth Armenia’s total public debt will reach 58.8 percent of GDP at the end of this year.The proportion stood at 56.6 percent in December 2016.

The minister defended continued government borrowing from mainly external sources. “We have borrowed from abroad to make investments,” he said.

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