ARMENIA’S GDP MAY DROP BY 3% PERCENT AT THE END OF THIS YEAR OR GROW AS MUCH: EXPERT

ARKA
Feb 11, 2010

YEREVAN, February 11, /ARKA/. Manuk Hergnyan, chairman of Economy
and Values research center and director of IV Consulting, said today
Armenia’s GDP may drop by 3% percent at the end of this year or grow
as much.

Speaking at a news conference at Novosti international press center,
he said several possible options of economic growth should be
considered. Particularly, if no second wave of crisis comes, nothing
will change in Armenia because it has no steady sources to back up
a new growth and the same economic model, based on money transfers,
construction, consumption and incomes, will continue to work.

‘Under this scenario Armenian GDP may either drop by 3% or grow as
much and the inflation rate may range between 6-9%,’ he said.

He said also if a second wave of crisis comes, the government’s
expansionist policy and the growing foreign debt may shake the
macroeconomic stability because Armenia’s set of tools to withstand it
is limited. He said under that scenario large-scale infrastructure
projects, like the North-South transport corridor, may serve as
stimulating factors.

He also said a new economy development model can not rely only on
construction sector. The government should stimulate exports and take
into account possible changes in the region.

The government expects the economy to grow this year by 1.2%.