Agence France Presse — English
November 27, 2008 Thursday 5:41 PM GMT

Armenia sees robust growth despite crisis, regional tensions

YEREVAN, Nov 27 2008

The Armenian parliament on Thursday approved a state budget that
forecasts only a small drop in economic growth despite the global
financial crisis and regional instability.

The budget forecasts economic growth of 9.2 percent in the ex-Soviet
republic next year, only slightly down from this year’s forecast 10
percent.

Prime Minister Tigran Sarkisian told lawmakers the budget "gives
preference to macro-economic and financial stability, which will
strengthen our country’s immunity in conditions of economic crisis."

The budget puts revenues at 2.9 billion dollars (2.2 billion euros)
and expenditures at 3.1 billion dollars (2.3 billion euros). Social
spending will account for 47.2 percent of the budget while defense and
security will take 22.4 percent.

Inflation is forecast at four percent and the minimum monthly wage
will rise to 100 dollars (77 euros) per month as of January 1.

The budget was approved by a vote of 81-5.

Armenia’s economy, fuelled by its booming construction and service
sectors, grew 13.8 percent in 2007 after an average of 12.6 percent in
the previous three years.

Armenia’s recent growth comes despite it being landlocked, short of
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.

Growth rates were expected to fall due to the global financial crisis
and aftershocks of the war in August between Russia and neighbouring
Georgia, which raised fears of instability in the region and disrupted
regional trade.