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Armenia Forecasts Increased Growth Rate For 2010

Some have complained that prices for imports have not come back down as the currency strengthened.
Some have complained that prices for imports have not come back down as the currency strengthened.
YEREVAN -- The Armenian Central Bank says the country's economy will expand by at least 3 percent this year, RFE/RL's Armenian Service reports.

The projection is an upward revision of earlier predictions of growth in Armenia in 2010.

Artur Stepanian, the head of the bank's Fiscal-Monetary Policy Department, told RFE/RL on May 5 that "expansionist fiscal-monetary policies" that were implemented last year as well as "a faster-than-expected global economic recovery" have resulted in the positive projection for growth in 2010.

"While we had forecast a [year-on-year] growth rate of 1.2 percent in January, we now expect it to come in at between 3 and 4 percent," he said.

The stronger-than-expected growth has primarily resulted from a roughly 10 percent rise in industrial output.

According to Stepanian, economic growth should remain relatively strong in the coming months in part because of rising remittances from Armenians working abroad. He said those cash transfers were up by over 8 percent in the first quarter compared to last year.

Stepanian added that the Central Bank predicted the inflation rate will fall to 6.2 percent by the end of 2010.

Prime Minister Tigran Sarkisian said last month that inflationary pressures on the Armenian economy would ease in the coming months.

The authorities say the increased international prices of foodstuffs, fuel, and other commodities imported into Armenia are behind the current high inflation rate.

But some independent economists and consumer-rights groups blame a de facto monopoly enjoyed by the country's leading importers, many of which have connections to the government.

Abgar Yeghoyan, of the nongovernmental organization Protection of Consumer Rights, complained on May 5 that the recent strengthening of the national currency, the dram, has still not pushed down the prices of key imported goods.

He told RFE/RL that prices rose considerably when the dram weakened against the U.S. dollar in February and March.