on the silk road

Armenia says can hit economic targets despite violence
May 4, 2008, 6:15 pm
Filed under: Uncategorized

Reuters reports that Armenian Deputy Economy Minister Vahram Ghushchyan said Armenia can maintain economic growth targets set for 2008 despite concerns by foreign investors following violence and political turmoil after the February 19 presidential election. 

MADRID, May 4 (Reuters) – Armenia can hit economic growth targets in 2008, a senior government official said on Sunday, playing down concerns that post-election street fighting had put off foreign investors.

Ten people were killed in Armenia after mass riots in March and the International Monetary Fund said the violence could put at risk the country’s target for 10 percent economic growth in 2008.

“I do not see why growth should go down,” Armenian Deputy Economy Minister Vahram Ghushchyan said during a presentation at the Asian Development Bank’s annual meeting in Madrid.

Ghushchyan did not think private investment in Armenia had suffered since street battles between police and opposition protestors who were demanding annulment of presidential elections.

“Many investors were dealing with us before the elections and the same investors are in Armenia after the elections,” said Ghushchyan.

Armenia’s economy is growing at a double-digit clip that has eased poverty but stoked inflation to 4.4 percent in 2007.

The Armenian central bank has targeted 4 percent inflation in 2008. The IMF says the landlocked country may need to tighten monetary policy further in light of rising global food and energy prices.

Ghushchyan said inflation might overshoot the central bank’s target slightly but Armenia could avoid further interest rate hikes if the country’s dram currency appreciated another 2-3 percent and foreign investment remained strong.

“It can be achieved through that channel rather than changing the interest rate,” he said. “Inflation may be 4, it may be 5 percent, I do believe this will be a hard year for any country, not just Armenia.”

Inflation rates are rising globally as food and energy costs soar.

The Manila-based Asian Development Bank is owned by 67 members, 48 from the Asian region. It uses policy dialogue, loans, equity investments, guarantees, grants and technical assistance in its mission to fight poverty in the region.

(Reporting by Andrew Hay; Editing by Nick Edwards)


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