IMF: ECONOMIC GROWTH TO START IN ARMENIA IN 2011
/ARKA/
May 12, 2009
YEREVAN
Economic growth is expected to start in Armenia as from 2011, IMF
Mission Chief for Armenia Mark Lewis said in his report on economic
prospects of Caucasus and Central Asia region in Yerevan Monday.
He pointed out that the international developments had their impact
on the situation in the country.
Economic product is to precipitously decline in Armenia in 2009 and
practically no economic growth is expected in 2010; economic growth
is to somehow start in 2011 in connection with the world and regional
developments, Lewis said.
According to him, Dram devaluation has been successful in the country,
devaluation pressure has dropped and international reserves have
stabilized.
Yet, the expert expects reduction in flows of the balance of payments,
export flows, private remittances and capital investments connected
with the situation in Russia where economic growth is expected to
drop down to minus 6% in 2009.
Imports are also to reduce in Armenia but slower that the balance
of payments, along with worsening economic indicators and compressed
demand for imported goods.
Fiscal and budgetary balance is to worsen due to reduction in state
revenues, weakening economic activity, but the government will take
steps to maintain high state expenditures at a high level to mitigate
the consequences of the economic crisis, Lewis said.
According=2 0to IMF forecasts, the national debt is to grow under
the current conditions. Armenia starts with a quite low level, but
the debt accumulation rate is to considerably speed up, Lewis said.
He pointed out that economic policy will allow the country somehow
mitigating the slump and crisis effects on the economy. In particular,
the government should follow a more expanding budgetary policy aimed
at economic rehabilitation, the expert said.
He also stressed the necessity of individual measures to protect most
vulnerable population groups in the country under the crisis.
The government is also to display vigilance in respect to outer
economic and financial risks especially in economic sector and control
the risks in the financial sector.
The International Monetary Fund reviewed its forecast on economic
growth in Armenia by the end of 2009 down to a 5% decline. Earlier,
the IMF was expecting minus 1.5% economic growth in the country by
the end of this year with inflation at 4.5%.
The indicator was reviewed due to serious decline in construction
sector and certain compression in the mining field.