YEREVAN, JUNE 26, ARMENPRESS. Armenia’s economic activity in 2016 has slowed down due to decline in real volumes of agriculture and construction sectors.

During the year the economic activity comprised 0.2% compared to 3.2% of the previous year and 2.2% figure predicted for the year, President of the Central Bank of Armenia (CBA) Artur Javadyan said during the discussion of the 2016 state budget performance report at the joint session of parliamentary standing committees presenting the CBA conclusion on budget performance report, Armenpress reported.

“Nevertheless, positive developments were also recorded in industry and services field the real growth of which comprised 5.1% and 4.1% respectively. The slowdown of Armenia’s economic activity was mainly linked with decline of domestic and foreign investments  over the past years, reduction of international prices for copper and crude products, as well as decline of household revenues as a result of decrease of remittances from Russia”, the CBA President said.

In 2016 the environment of private investments continued to remain weak whereas in terms of private consumption recovery trends for growth have been recorded. In 2016 the low inflatory trends contributed to reduction of inflatory expectations which was reflected in the market interest rates level.

“The general fiscal policy has been carried out towards increasing the state consumption and state capital investments as a result of which the 2016 state budget deficit in GDP surpassed the level of the previous year by 2%, comprising 5.5% of GDP. The net export contributed to the 2016 economic growth thanks to significant growth of export over imports. As a result the country’s external balance was ensured”, he said.

Artur Javadyan added that during 2016 the state budget deficit amounted to 278 billion AMD against the planned 180 billion AMD. “The increase of state deficit of course affected the state debt and resulted in increase of state debt-GDP ratio. The state debt-GDP ratio comprised 56.7%. In this regard, the 2017 fiscal policy is limited by state deficit fiscal rule the consistent maintenance of which is very important in terms of ensuring the manageability of state debt and macroeconomic stability”, the CBA President stated.