Ex-prime minister predicts 4 percent GDP decline for 2011

YEREVAN, December 22. /ARKA/. A former Armenian prime minister questioned today the government’s projection of a GDP growth this year telling a news conference that in fact the economy would decline by 4 percent. Hrant Bagratian, who served in the administration of ex-president Levon Ter-Petrosian, said the full-year inflation would be twice higher than projected by the budget.

According to 2011 budget, the country will see a 4.6% GDP expansion while the inflation will be 4% (± 1, 5%)."Today the real inflation is 12.5%, and therefore the question is how the authorities are going to bring it down to 4% in just a week?" he asked.

Bagratian also said given the official inflation rates the budget revenues must increase by 4.5% and not by 0.3% as projected by the state budget. He also said the anticipated decline in remittances from labor migrants to Armenia next year would have a dramatic impact on the exchange rate of the national currency and urged the government to begin the process of ‘sterilization’ of foreign currencies to avoid this.

According to the latest data of the National Statistical Service of Armenia, inflation in November rose by 4.8% from a year before, driven by a 6.4% rise in prices of foodstuffs, including alcoholic beverages and tobacco, a 3.8% rise in industrial goods prices and a 2.6% rise in services prices.  -0-