Ex-deputy prime minister on what is behind Armenia's double-digit growth
YEREVAN, November 2. /ARKA/. Armenia's domestic resources are insufficient for posting double-digit growth, former Deputy Prime Minister Vache Gabrielyan said in an interview with "Special Opinion" program aired on the YouTube channel of Novosti-Armenia news agency.
Asked what is then behind the growth, Gabrielyan who is now Dean of the College of Business and Economics at the American University of Armenia, said when a country records double-digit economic growth, it means that it has exceeded its economic potential.
"This is not only my assessment: the Armenian government in the draft state budget for 2021 estimated the growth potential at about 5%. According to that draft, with maximum efforts a higher growth was possible. I mean the target estimate of 7%," he said.
Gabrielyan said because of the Russia-Ukraine war, Armenia saw an unprecedented influx of both foreign nationals (mainly from Russia) and capital, as well as some services, which triggered a growth that could not have happened all other things being equal.
He said the growth was not driven by endogenous or internal factors, nor by investments and neither by increased labor productivity. 'It happened mainly due to flows from Russia," he said, adding that similar processes took place in neighboring Georgia and in Kazakhstan.
Gabrielyan noted that Armenia's economy faced the task of coming out of the 2020 recession, and if in other countries this exit occurred in 2021, it has not happened in Armenia, and the problem of restoring the potential has not yet been solved.
"From this point of view, there was an internal economic resource, but this by no means meant double-digit economic growth, which could have happened without external factors," he said.
Armenia's real GDP growth in 2021 compared to 2020 amounted to 5.7%, while the nominal GDP growth was about 13%. GDP per capita amounted to $4,680, while in 2020 it was $4,269 and $4,597 in 2019.
In 2022, Armenia's economy upped by 12.6%; GDP per capita increased to $6,569 from $4,679 in 2021.
Armenian government's growth projection for 2023 is 7%. According to the Central Bank's latest forecast, it will be 7.2%, The draft budget for 2024 also projects s 7% economic growth, while the Central Bank expects GDP to grow by 5.6%. -0-
