This economic report records theeconomic activities of Armenia for the year 2013. A steepdecline in construction caused economic growth to weaken to0.6 percent in the second quarter of 2013 (year-on-year)from 7.5 percent in the first quarter and 7.2 percent in2012 as a whole. Developments of the current account weremore favorable than expected earlier. The volume of metalexports rose substantially, more than offsetting lowerinternational prices for copper and remittances remainedhigh despite the slowdown of economic growth in Russia. Fora third year in a row, fiscal policy is likely to be tighterbecause of lower than budgeted capital spending. Thisoutcome reflects delays in the North-South corridorinfrastructure project. With continued sluggish growthexpected in Armenia’s main trading partners, includingRussia and theEuropean Union (EU), we project growth ofabout 4–5 percent a year over the medium term. Armenia’sauthorities recognize the need to improve the businessenvironment and competitiveness. The government’smedium-term reform agenda, supported by a new DevelopmentPolicy Operation from the World Bank, reflects thesepriorities. It includes critical business climate and publicadministration reforms, aimed at strengtheningcompetitiveness and public sector efficiency. These areexpected to contribute to job creation through reducing thecosts of doing business for firms, expanding access tocredit toSmall and medium enterprises (SMEs), andincreasing opportunities for employment and job creationthrough increased trade and connectivity within and outsideArmenian borders.
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