Back in 2013, at a press conference, Armenia’s President Serzh Sargsyan announced that every consecutive government, which does not ensure 7% economic growth, should resign.
Under this light, let’s take a look at the economic growth promised by various governments since 2013. Thus, despite the presidential statement, the 2013 government in its medium-term expenditure program for 2014-2016 forecasted an economic growth of 6.3-6.4 percent.
2014 state budget forecast had a more modest look: the government promises to increase the GDP by 5.2 percent. By 2015 draft budget presented by the government only 4.1% growth was expected, while the Deputy Chairman of the Central Bank said at the end of the year said that only about 2.5-3.8 percent economic growth should be expected.
Thus it becomes clear that despite the rather optimistic forecasts, however, in the years following the 2013 the economic growth rate ranged between 3-4%.
Recently, the National Statistics Service published data on the economic situation condition in 2016, according to which Armenia’s economic activity index in January-December amounted to 100.5%. Thus in 2016, instead of the intended 2.2-2.4% economic growth only 0.5 was achieved.
However, as seen in the diagram, during all subsequent years Armenia’s successive governments have failed to secure this indicator.
Such a low level of economic growth is quite disturbing, since the impossibility to reduce over 18 percent unemployment and 31 percent poverty rates by this slow pace of economic growth becomes quite obvious. Economic studies claim that only 5 percent economic growth and a higher level of employment can significantly reduce poverty and ensure employment growth. Another common Rule of Economics ( The rule of 70) indicates that under 0.5% economic growth, the Republic of Armenia will be able to double its GDP only 140 years later.
In 2016, the gross output of agriculture and fishing decreased by 5 percent, including the volume of agricultural production decrease by 5.2 percent, while the volume of crop production – by 11.7 percent. A 10.1 percent decrease was registered in the construction industry, including a 37.7 percent decline in housing construction. The trade and services sectors are in better conditions, having registered a 1% growth, as well as the industry sector, where growth reached 6.7%.
It should be noted that in October 2016, Prime Minister Karen Karapetyan has aimed for 3.2% economic growth in 2017.