ArmeniaNow  --  While Armenia’s economy showed some signs of improvement as compared to 2010, including in terms of restoring agricultural output and growth in the industrial sector, the outgoing year has also been marked by inflation pressures, with ordinary people mostly unsatisfied with the economic situation because of rising food prices.

Assessing the socio-economic conditions of the country citizens are also concerned over unemployment and the living conditions of villagers.

After a 2.1-percent economic growth registered in 2010, the government set the target of a 4.6-percent GDP growth for 2011. The results for the first ten months of the year showed Armenia’s economy expanding by only 2.4 percent yet. At the same time, remittances from abroad in January-October grew by 23 percent compared to the same period in 2010. Remittances and transfers of money by Armenians living or working abroad have been considered a major factor in forming Armenia’s GDP in the recent decade.

In construction, which accounted for a robust GDP growth in the middle of the 2000s, in 2011 (as of January-October) showed a 25-percent decline , which most economists regard as a consequence of a wrong government policy, as instead of stimulating demand for housing, the government in fact increased its supply.

Meanwhile, the government program offering supposedly affordable housing to young families has not yet proved particularly effective as only a few families become eligible for a mortgage on qualifications other than age.

One of the economic sectors that showed improvement is agriculture , which was declared as one of the priorities at the end of last year following a significant decline. While showing a 15-percent rise in January-September, the agricultural sector still did not avoid some problems, such as those related to crediting and insurance.

The information technologies sector, a branch of the economy that has for years been considered a priority in Armenia, has seen an event that has brought it more international recognition and publicity. In November the government of Armenia as well as the country’s IT industry invited Co-founder of the Apple Computer Corporation Steve Wozniak , who is considered to be the father of the personal computer. In Armenia Wozniak received the presidential IT award for his global contribution to the development of information technologies.

Business experts also consider important measures taken in another sector that the government focuses its attention on – small and medium-sized enterprise (SME) . But specialists still say the government needs to step up its efforts and take more drastic measures for tangible reforms in the sphere.

The government keeps reassuring the public and the business community that it will be consistent in reforming the sphere, which it says is once again manifested in the program of assistance to SMEs for 2012.

In 2011, the government presented another initiative aimed at boosting the economy by way of export promotion. However, representatives of the business community and economic experts did not make an unequivocally positive assessment of the concept offered by the government.

Factors contributing to export promotion, according to the government, will also include Armenia’s joining the free trade zone that has been agreed upon by some of the former Soviet countries, a new integration where Russia is believed to be the main driving force.

Still at the beginning of the year President Serzh Sargsyan issued strict instructions for tax collections to be improved, as the International Monetary Fund’s representative in Armenia once again pointed out the lack of progress in improving tax collection and reducing the untaxed segments of the economy. And before the government came up with a legislative initiative aimed at improving tax administration, the Armenian economy this year was again assessed as less competitive than its neighbors’.

In the 2012 State Budget the government plans some positive trends also for the coming year, however, the economic growth target is lower than it had been set for this year – 4.2 percent. While the government argues that the biggest advantage of next year’s budget is its social orientation and certain economists add that if proper policies are put in place greater results can be expected, some pro-opposition economists think that Armenia’s economy in 2012 will take a turn for the worse, since the budget is “as much a state budget as it is a pre-election budget”.