ARMENIAN PRIME MINISTER EXPECTS BETTER ECONOMIC PROGRESS

ARKA
May 20, 2008

YEREVAN, May 20. /ARKA/. RA Prime Minister Tigran Sargsian said the
country’s economic progress was impressive last year, but it could
have been better. He stressed the importance of ensuring equal taxation
terms, so that everyone would be equal to law.

"This is the guarantee of our victory," the Prime Minister said today
at the parliament meeting.

Sargsian said budget receipts hit a record high of 33% last year. The
share of taxes increased by 1.6% in the country’s GDP. However,
the budget execution helped to revealed serious drawbacks in tax and
customs administrations in 2007, according to the Premier. Indirect
taxes had a lion’s share in the tax system, whereas direct taxes
decreased as compared to 2006. Sargsian believes the reasons for this
process are growing imports and the county’s inner political situation.

"Macroeconomic indicators of 2007 both impress and imposes high
responsibility," the Premier said.

He pointed out that last year GDP rose 13.8%, while inflation was 6.6%
and budget deficit made 1.5%. Sargsian said 2007 was a successful
economic year for Armenia in comparison with other CIS- members.

Countries with transitional economy become politically active
when they achieve economic progress and improve social conditions,
according to the Prime Minister. In this case, mistakes in government
activities become apparent and citizens demand correction of faults,
Sargsian said.

The budget surplus totaled 4.2bln drams (without credits and foreign
investments) in 2007 – 0.1% of GDP (against 0.6% GDP deficit in 2006).

Last year, Armenia’s budget receipts hit a record high of 570.1bln
drams – 29.7% (131.4bln drams) increase as compared to 2006. Budget
expenditures increased by 24.6% (111.8mln drams) to 565.9bln drams
in the reporting period. ($1 – 308.24 drams).