A significant portion of Armenia’s economy has emerged from the shadows, and notable work is being carried out in the fight against corruption. Such an assessment was given by the website “Eurasia Rhythm” in its article titled “What Accounts for the High Rate of Growth of Armenia’s Gross Domestic Product (GDP),” addressing Armenia’s macroeconomic situation.
The author first recalls the December 5 statement of RA Prime Minister Nikol Pashinyan, according to which, per official statistics, the country’s GDP growth for the first three quarters of the year stood at 7.5 percent. “This is the highest indicator, not only among the countries of the Eurasian Economic Union. According to the forecast of the International Monetary Fund, Armenia will be the only country on the European continent whose GDP growth will exceed 6 percent next year,” the article noted.
The author raised the question of what accounts for such optimism and recalled that, according to data from international financial institutions, of Armenia’s $3 billion budget, $1 billion was stolen in the past, while nearly $900 million did not reach the budget as taxes. “After the change of government last spring, there was a tendency to reduce the ‘shadow sector’ in the economy, and now, according to the assessments of RA financial bodies and experts, the shadow economy does not exceed 22 percent. The progress is significant, but it is assumed that this figure could drop to 15-16 percent and even lower,” the publication noted.
The author observed that the emergence of one segment of the economy from the shadows immediately increased the flow of funds into the state treasury. As a result, the budget surplus for the first half of 2019 stood at $255.4 million, which contributed to a reduction in the debt-to-GDP ratio. The author noted that this is partly also the result of Prime Minister Nikol Pashinyan’s call to demand a receipt for any purchase, but stressed that much work remains to be done, since the largest share of the shadow economy is still in trade, agriculture, passenger transport and other sectors.
The article also noted that the economic growth forecast in the 2020 state budget draft is conservative, while at the same time stressing that for a post-Soviet country it is a fairly high indicator.
