CENTRAL BANK: 8-11% ECONOMIC GROWTH EXPECTED IN ARMENIA IN FIRST 3 QUARTERS OF 2009

ARKA
Oct 14, 2008

YEREVAN, October 14. /ARKA/. According to the basic scenario, economic
growth is to constitute 8-10% in Armenia in the first three quarters
of 2009 as compared with 6-9% under the alternate scenario. A 10-11%
economic growth is expected in the fourth quarter of this year.

According to the basic scenario, the fields of services and
construction are expected to have the greatest impact on economic
growth, says the Protocol of the Central Bank of Armenia (CBA) on
forecasts and monetary and credit policy for the 4th quarter of 2008.

4-6% industrial growth rates are to be regained in the first 3
quarters of 2009 due to increase in the fields of energy, production of
construction materials, food and processing, metallurgy and chemical
industries.

Added value is expected to grow by 3-5% in the fourth quarter of this
year and industrial growth is to be provided through increase in energy
sector, processing industry and production of beverages in the period.

As per the basic scenario, mainly expanding housing construction,
processing industry and services’ sector are to help achieve a 16-17%
increase in construction area. High construction growth rates are
to be maintained in the first 3 quarters of next year; a 12-13%
construction growth in the period is attributed to expected investments
in the fields of transport, communication and energ y, metallurgy and
chemical industries. According to the alternate scenario, construction
growth is to make 8-10%.

The Central Bank made a downward adjustment to its forecast on
growth due to slowing-down rates of growth of real income of
the population and money transfers in particular. Consequently,
real growth of added value in services’ sector is to make 11-12%
in the fourth quarter. Service growth rates are expected to remain
at 9-12% in the first 3 quarters of 2009 as compared with 7-9% in
the alternate scenario. Real growth of agriculture is to be 6-8%
in the fourth quarter of this year as compared with 3% expected in
2009 due to climate conditions.

According to the CBA, a 10.5% economic growth was recorded in Armenia
in the third quarter of this year with added value of agriculture
being at 6.9% and that of industrial production at 5.2%. Industrial
growth was achieved mainly due to increasing production output of
energy sector, mining and food industries. Construction grew by 17.2%
and services’ sector by 10.7%.

A 13.6% economic growth was recorded in the country in January-August
2007.

Under the state budget, a 10% GDP growth is expected in Armenia
in 2008.