Agence France Presse — English
January 24, 2008 Thursday 2:41 PM GMT

Armenia’s economy surges 13.8 percent: minister

YEREVAN, Jan 24 2008

Ex-Soviet Armenia’s economy grew by 13.8 percent in 2007 fuelled by
its booming construction and service sectors, Finance and Economy
Minister Vardan Khachatrian said Thursday.

After averaging a growth rate of 12.6 percent in the previous three
years, 2007 marked an "unprecedented improvement" in the Armenian
economy, Khachatrian told a press conference.

Amid a building boom, the construction sector alone accounted for 4.6
percent of overall growth, he said. The service sector came second,
accounting for 3.6 percent.

The positive economic figures came less than a month before
presidential elections on February 19, when Prime Minister Serzh
Sarkisian is hoping to fight off government critics to clinch the
country’s top political post.

Armenia’s recent growth comes despite it being landlocked, short on
natural resources and having fraught relations with two neighbouring
states.

Turkey and Azerbaijan have imposed economic embargoes and cut off
relations with Yerevan over its backing of ethnic Armenian
separatists in Azerbaijan’s breakaway region of Nagorny Karabakh.

Armenia’s gross domestic product (GDP) surpassed nine billion dollars
(6.1 billion euros) in 2007, three times its level in 2000,
Khachatrian said.

Meanwhile public finances were in better shape than had been
forecast.

The government finished 2007 with a budget deficit of 0.8 percent of
GDP, Khachatrian said, less than the forecast 2.3 percent after
budget revenues rose by nearly a third.

Government spending was equal to 19.5 percent of GDP, with spending
on social programmes rising by 20.2 percent in comparison with 2006.

He said the number of Armenians living below the poverty line had
fallen from 56 percent in 1999 to 26.5 percent last year.