EBRD FORECASTS 8.5% GROWTH OF ARMENIAN ECONOMY IN 2007

Noyan Tapan
Dec 12 2006

YEREVAN, DECEMBER 12, NOYAN TAPAN. According to the 2006 Transition
Report of the European Bank for Reconstruction and Developemnt (EBRD),
in 2007 Armenia’s GDP will grow by 8.5%, while a 12.5% GDP grwoth
was forecast for 2006.

Alexandru Kirmichiu, EBRD economist, said this when presenting the
above mentioned report on December 12. In his words, 50% of Armenia’s
economic growth is now ensured by the construction sector, with
services also accounting for a considerable share of GDP growth. The
EBRD assessed as positive the reforms in the country’s financial
sector and the entrance of a new mobile phone communication operator
into the country. A. Kirmichiu noted that the lack of competition is
the main problem of the Armenia’s economic development, while reforms
of the business environment and corporate governance will remain
a condition for increasing investments. According to the speaker,
although in 2005 the private sector’s crediting increased by 33% in
Armenia, the accessibility of financing is one of the lowest in the
CIS and Eastern Europe. The ratio of domestic credits to GDP made 8.2%
in the country7 It was noted that this index may be doubled thanks to
further reforms in the financial sector. The EBRD economist noted that
the dram’s appreciation may pose a threat to economic development,
if the productivity of the Armenian economy is not increased. He
expressed a hope that investments to foster this growth will be made.

From: Emil Lazarian | Ararat NewsPress