ECONOMIC DECLINE TO MAKE 16-17% IN ARMENIA IN LATE 2009, WB REPRESENTATIVE SAYS

Noyan Tapan
Dec 18, 2009

YEREVAN, DECEMBER 18, NOYAN TAPAN. 2009 was a difficult year for
Armenia as the country was badly hit by the global economic crisis,
Head of the World Bank Amenia Office Aristomene Varudakis said at the
December 17 press conference. As regards indices, according to him, the
crisis was already at its height, and now some signs of stabilization
are noticeable. "However, we expect the economic decline to make 16-17%
for the whole year," A. Varudakis said.

He pointed out some positive changes in the Armenian economy, in
particular some growth in production indices in July-September 2009
compared to the same period of 2008. Despite a considerabel fall in
construction volumes, the number of transactions in the real estate
market increased in September-October.

A. Varudakis noted that in parallel with economic decline, the number
of the poor grew in Armenia, particularly, surveys show that the
number of people living below the poverty line grew by 90 thousand.

Speaking about the state debt of Armenia, A. Varudakis said it
currently makes 37% and is forecast to make up to 50% of GDP by 2011.

In his words, the recovery of Armenia’s economy will be slow and mild,
and in 2010 GDP growth will make 1.5%. He underlined that the crisis
demonstrated once again the need to raise the overall resistibility of
Armenian economy so that in conditions of the crisis it can maintain
sustainable growth rates and become more competitive.

A. Varudakis said there are three preconditions for improving the
resistibility of the country’s economy:

– it is necessary to ensure great opportunities for potential
investors, including measures to reduce the role of oligopolies in
the market and economy,

– a more favorable investment climate should be created for
investors, and in this connection the fight against corruption in
the revenue-collecting bodies is of importance,

– Armenia should make investments in infrastructure and IT sector
to reduce transport charges and make the domestic economy more
competitive.