ECONOMY

Vaagn KHACHATRIAN

---

Vaagn Khachatrian, Advisor to the president of the Republic of Armenia in 1996-1998 (Erevan, Armenia)

---

In 2005, the Armenian economy continued to develop at a rapid pace characteristic of the past four years. According to official data, its gross domestic product (GDP) in 2005 exceeded the previous year’s level by 14%. This economic growth was accompanied by deflation (0.2%) and a further rise of the national currency against the leading currencies of the world.

The recovery of the past ten years can be explained by consistent implementation of reforms aimed at creating a market economy, facilitated by large-scale external financing in the form of various grants or favorable conditions. Nevertheless, Armenia remains a poor country with per capita income of $1,400, or a quarter of the figure for the Baltic countries.

Real Sector

Over the past three years, economic growth has accelerated still further. In 2001-2004, average annual growth was twice as fast as in the previous four years.

According to the U.N. Statistics Division, in 2002-2004 double-digit growth was recorded in only six countries of the world (out of a total of 212 countries), with Armenia ranking fourth in 2002 (13.2%) and third in 2003 (14.0%). An interesting point to note is that average GDP growth in the republic in recent years was roughly twice as high as in the “lower middle income countries,” among which, according to the World Bank classification, Armenia belongs. In absolute terms, GDP in 2004 totaled AMD 1,896.4 billion ($3,551.1 million), and in 2005, AMD 2,168.2 billion ($4,756.9 million). This indicator, which reflects the size of the economy……………..

---

Please fill in the subscription form to obtain the full text.