The ambitious growth targets were set in a mid-term public spending plan approved by Prime Minister Nikol Pashinian’s cabinet at an extraordinary session held behind the closed doors.
The move followed a significant upward revision of the government’s economic growth target for this year. Pashinian said on July 1 that Armenia’s Gross Domestic Product is now projected to increase by 6 percent.
The government had forecast earlier that the Armenian economy will grow by 3.2 percent in 2021 after shrinking by 7.6 percent last year due to the coronavirus pandemic and the war in Nagorno-Karabakh.
The World Bank offered a similar outlook in late March, saying that growth will likely reach 3.4 percent this year and accelerate to 4.3 percent in 2022.
“The recovery will be slow; the economy is unlikely to return to pre-COVID output levels until 2023,” the bank cautioned in a report.
The International Monetary Fund was less upbeat about Armenia’s short-term growth prospects in its World Economic Outlook released in April.
In a statement, Pashinian’s government said rising investments anticipated by it will be the main drivers of steady fast growth projected for the next five years. It did not say whether the government hopes to attract most of those investments from Armenian or foreign private investors or international development agencies.
Economy Minister Vahan Kerobian said in this regard that the government will set up three “industrial zones” in the country. He said two of them will mainly cater for Iranian investors.
“Iranian companies are now showing a strong interest in relocating part of their manufacturing facilities to Armenia,” Kerobian told journalists.
According to the government program, faster GDP growth will also translate into a sizable rise in tax revenues. They are projected to increase from about 1.4 trillion drams ($2.8 billion) in 2020 to 2.1 trillion drams in 2024.