The Asian Development Bank (ADB) has indicated a slower economic growth and higher inflation in Armenia in 2013.
The bank's recent report shows that the country worsened significantly its main macroeconomic indicators in 2013 compared to 2012.
"Economic growth slowed to 3.5 percent in 2013 from 7.2 percent in 2012, while average annual inflation more than doubled to 5.8 percent in 2013 from 2.6 percent in 2012," the report noted.
The document further stresses a drop in agriculture and construction sectors.
"Growth in agriculture moderated to 8.1 percent in 2013 from 9.5 percent in 2012. Construction fell by 11.2 percent, reversing 3.3 percent growth in 2012," the report reads. "The decline came from lower demand and investment in construction and delays in large public infrastructure projects."
The ADB's report also indicated a decline in the amount of the foreign direct investments (FDI).
"Inflows of foreign direct investment concentrated in mining and energy fell by 9.2 percent to an estimated $430 million during 2013," the document shows.
The ADB has specified high unemployment as a challenge for Armenia. The bank believes that economic growth has had limited impact thus far on Armenia's high unemployment.
"Despite some reduction during the past four years, the persistently high unemployment rate, estimated at 16.8 percent in 2013, hinders poverty reduction," the report outlined. "A shrinking workforce (caused by outward migration), outmoded worker skills, and market distortions created by a large informal sector continue to undermine Armenia's growth potential."
The bank noted that Armenian government recognizes the need to foster private sector development in order to create more jobs.
"Expanding employment by creating high-quality and highly productive jobs is an objective of the government's Armenia Development Strategy 2025," the report reads. "Achieving this is seen to depend mainly on employment growth, human capital development, an improved social protection system, and better public administration and governance."
The ADB indicated that improving the business climate to attract more FDI is also critical for boosting employment in Armenia. "Weak foreign investment has hindered the economy's structural transformation," the report underscored.
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