Economists believe Armenia’s GDP growth rate of 7.5% is exaggerated

There has been a notable growth in Armenia’s Gross Domestic Product (GDP) rate last year. The GDP rate grew by 7.5% compared with that of 2016.

According to official statistics, it was the highest GDP growth rate recorded over the past ten years.

However, some economists don’t trust these figures. They believe it’s necessary to find out on what methods those calculations have been based.

Sergey Bagratyan, an economist and member of the Armenian National Assembly told JAMnews that the indices confirming the growth can be ‘exaggerated’. The MP also pointed out that if the data is accurate and the GDP rate has grown then it should have a tangible effect on people’s lives.

The economist stressed that a 7.5% growth makes it possible to solve certain social issues.

“The growth in GDP should be accompanied by an increase in pensions and salaries and a reduction of prices on offered services. The amount that the government can allocate to a single sphere or distribute between several spheres at its own discretion has increased as a result of the GDP growth. A 7% growth in the GDP rate is equal to AMD 100 billion (USD 207 million).

“The whole amount can be allocated to increase pensions. In this case, pensions can be increased by AMD 25 000 (USD 50). Another option is to increase pensions by AMD 2 500 (USD 5) and to use the rest of the sum to reduce service prices, to mitigate the amount of tuition fees etc. ,” said Bagratyan.

Suren Karayan, the Minister of Economic Development and Investments of Armenia has rushed to assert that the growth in GDP was the Armenian government’s achievement. In the Minister’s words, the success achieved in the services and industry spheres greatly contributed:

“Construction volumes increased by 0.6%. There was also an increase in industry rates. It is noteworthy that the processing industry has the largest share in the growth of industrial production. In 2017, the growth of industry rate was 12.6%, while that of the processing industry was 15.7%. At the same time there was a growth in the rates of trade and services. A 2.6% growth was also reported in the mining industry.”