The Armenian authorities acknowledged their failure to ensure a 5.2 percent economic growth set in the state budget for 2014.
As President Serzh Sargsyan is expecting the new government to stabilize the economy, Prime Minister Ovik Abramyan has slashed the economic forecasts.
The government promised to ensure a four percent economic growth which seems unlikely as Armenia's complicated socio-economic situation does not promise any significant progress. The president had agreed with the economic slowdown earlier, Abramyan said at a governmental meeting.
IMF experts recently predicted that Armenian new government is not capable to ensure the projected a five percent economic growth in 2014. "The growth rate will be lower than 4.2 percent," they said.
The previous government failed to achieve a promised 7 percent economic growth in 2013. The economic growth rate amounted to 3.5 percent in 2013.
Local economists believe that the economic slowdown testifies for the inability of authorities to fulfill their promises on improving people's living standards and poverty reduction given before presidential and parliamentary elections.
They said the high poverty and unemployment rate remain unchanged over the last years. "The significant task of the authorities is not to improve people's living standards. Their main task is to ensure the interests of certain groups of people," experts noted.
On the background of the economic crisis that will be followed by the electricity tariffs hike from August, the authorities are concerned about the growing public outrage. The hike in electricity tariffs will definitely lead to further increase of several goods and service prices contributing to further economic slowdown in Armenia.
Armenia lacks necessary resources to achieve an economic breakthrough regardless of changes to the government. Armenia has neither enormous economic projects, nor foreign investment inflows to improve its population's living standards. The post-Soviet country will hardly achieve an economic growth for subsequent years.