Download Sarkisian Touts `Macroeconomic Stability` In Armenia

Sarkisian Touts 'Macroeconomic Stability' In Armenia
By Emil Danielyan
RFE/RL Armenia Report - 24/12/2015
Armenia - President Serzh Sarkisian hosts a year-end reception for
leading businesspeople, Yerevan, 23Dec2015.
President Serzh Sarkisian has praised Armenia's macroeconomic performance
in 2015, arguing that the domestic economy has continued to grow and the
national currency has only slightly depreciated over the past year despite
adverse external influences.
"The key indicators of economic developments in the first eleven months of
2015 suggest that thanks to our efforts we have succeeded in making our
country's economic environment practically immune to major shocks resulting
from negative trends coming from the outside world," he told leading
Armenian businesspeople at a year-end reception hosted late on Wednesday.
Sarkisian argued that the Armenian economy is on course to expand by more
than 3 percent this year on the back of major production gains in agriculture
and manufacturing, contrary to gloomy forecasts made by international
lending institutions this spring. He said the growth has helped to push up
the average monthly salary in the country by 8.5 percent to roughly 185,000
drams ($385). Year-on-year inflation stood at less than 2 percent in
November, he stressed.
Sarkisian went on to note the relatively stable exchange rate of the
Armenian dram. The national currency weakened by 17 percent against the
U.S. dollar in November-December 2014 amid a sharp fall in dollardenominated remittances from Armenian migrant workers in Russia. The dram
has only slightly depreciated since January despite a continued fall in oil
prices that plunged the Russian economy into recession.
"Of course,
figures are
with them,"
sustainable
factors."
many countries would be happy to have such indicators, but our
not high in absolute terms and we therefore cannot be satisfied
cautioned the president. "Armenia needs faster, long-term and
growth that would not be vulnerable to negative external
Citing the economic situation in Russia, Armenia's leading trading partner,
the International Monetary and the World Bank said early this year that the
Armenian economy will barely grow or may even contract in 2015. Both
institutions revised their projections upwards in the following months.
The head of the World Bank office in Yerevan, Laura Bailey, said on
Wednesday that Armenia's Gross Domestic Product will increase by at least
3.2 percent in real terms in 2015. She forecast that growth will slow down
to 2.2 percent in 2016.
The Armenian government set the same growth target in its 2016 budget
proposal approved by the parliament two weeks ago. It says that that the
slower growth will translate into a slight drop in state revenue next year.
And although government spending is projected to rise by over 5 percent
next year the state budget does not envisage increases in public sector
salaries, pensions and poverty benefits.
Prime Minister Hovik Abrahamian admitted last month that the socioeconomic
situation in Armenia is unlikely to markedly improve next year. "In view of
tense geopolitical developments, promising an immediate betterment of all
aspects of social welfare would be a populistic but not honest approach,"
he told lawmakers in Yerevan.
Opposition politicians and other critics of the government say that
economic conditions have actually worsened this year despite the official
growth figures. In particular, they point to a 7 percent drop in retail and
wholesale trade recorded by the National Statistical Service (NSS) in
January-November.
This explains why imports of goods to Armenia plummeted by over 26 percent
in the same period. The NSS also reported a nearly 5 percent fall in
Armenian exports. That was mainly attributable to the collapse of the
Russian ruble and decreased international prices of copper, molybdenum and
gold, a key Armenian export.