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Minister: Armenian government had to reconsider its development priorities

18.04.2022, 12:04
In an interview with Russia business daily 'Kommersant' Armenian Minister of Economy Vahan Kerobyan said the government had to reconsider its development priorities determined for 2022 due to dramatic geopolitical changes.
Minister: Armenian government had to reconsider its development priorities

YEREVAN, April 18. /ARKA/. In an interview with Russia business daily 'Kommersant' Armenian Minister of Economy Vahan Kerobyan said the government had to reconsider its development priorities determined for 2022 due to dramatic geopolitical changes.

"Last year, Armenia's economy grew by 5.7%, the highest growth rate among member states of the Eurasian Economic Union, while inflation upped 7.7%, the lowest rate among the same countries. At the beginning of this year we expected the economic growth to expand after 12% growth reported for January-February, but the situation has changed and we had to completely reconsider our priorities by focusing first of all on food security issues," he said.

"Overall, we are working now to revise the structure of Armenia's economy, as for a long time it has been growing primarily due to consumption, and now we want to make industry- primarily metallurgy and chemical industry - the main drivers of the growth," the minister said.

"We are doing well in jewelry and gemstone processing - this is a priority sector of the economy," he added.

"We are also interested in the development of pharmaceuticals, food production, light industry, which we now call a creative industry. This is where we're able to move from selling labor to creating our own brands and increasing productivity," Kerobyan said.

"We have large deposits of copper and molybdenum, gold, silver, zinc. We want to deepen the production of these metals - this is a very big market for Armenia, as well as processing scrap metal, both ferrous and aluminum. We have already registered great success, but there is still much to do," the Minister said.

Recalling that during the Soviet era Armenia had a well-developed chemical industry, particularly rubber production, Kerobyan noted that there is an intention to revive these industries.

"Besides, we still have large energy resources, especially solar energy. In general, we have the cheapest electricity in the region, our task is to find new opportunities to increase its consumption," he said.

According to the Minister, the uncertainty of the ruble exchange rate has already had a negative impact on Armenian exporters, and there are concerns about mutual trade: thus, in January-February, imports from Russia increased by 70% compared to last year, and exports - by 45%, but in March, both figures declined.

"Our first priority here is to find instruments that will allow companies to trade freely, with a horizon of certainty in currency risks," he said.

Armenian government’s growth projection for 2022 is 7%, and inflation is set at 4% (± 1.5%). Earlier, the Central Bank revised down its growth projection from 5.3% to 1.6% citing the problems triggered by the Russian-Ukrainian conflict. -0-

Also, the World Bank has downgraded its growth forecast for Armenia for 2022 from 5.3 percent pre-war to 1.2 percent, with lower remittances and real wages impacting consumption; heightened uncertainty impacting investment; and exports contracting due to the projected contraction in Russia and slowing global and regional growth. -0-