Armenia’s positive macroeconomic picture should not be misleading. Economic growth should be assessed not only by numbers but by substance. This is stated by former Chairman of the Central Bank of Armenia Bagrat Asatryan.
Growth Potential Up to 6.5%
According to Asatryan’s estimate, this year’s economic growth could reach 6–6.5%. In his words, this potential is visible, but it is important not just to record the increase in indicators, but to understand what factors drive it.
“When the factors do not contribute to substantial, qualitative growth, they cannot affect the economic growth indicator to the same extent either. There is no need to get excited just because the economic activity indicator has exceeded last year’s. We need to delve into the substance,” he notes.
In his conviction, the primary function of the authorities should be the analysis of program deviations — what was planned and what results were achieved. If the results do not match the plans, then it is a matter of policy inefficiency.
Macro Stability Exists, Structural Shifts Are Insufficient
The former CB Chairman emphasizes the fact that macroeconomic stability is maintained — continuous economic growth, relatively low inflation. He considers this a serious achievement that must be preserved.
However, according to him, the problem is structural: qualitative changes in exports, the development of competitive production and competitive sectors have not yet become a sufficient priority. “We are growing, but we are not developing,” Asatryan states, stressing the need to work on changing the structure of the economy and increasing efficiency.
Tax Culture and the Dangers of “Zero Tax”
Addressing social and tax policy, Asatryan criticizes populist approaches of “freeing everyone from taxes.”
In his conviction, tax collection is not just a matter of budget revenues, but a culture. “There should be no zero tax. Privileges and other incentive mechanisms can be applied, but completely removing from the tax field is a mistake, because bringing it back into the tax field later becomes much more difficult,” he notes.
At the same time, he warns that fiscal policy should not become dominant over other directions of economic policy. Fiscal discipline is important, and Armenia has made significant progress in this area, but tax-budget austerity should not stifle other development directions.
Debt Growth and Disproportionate Expenditures
Asatryan finds it concerning that the growth rate of public debt exceeds the economic growth rate, especially when the budget records under-execution of expenditures, particularly capital ones.
According to him, if fundamental, growth-potential-creating expenditures are not carried out, while debt continues to grow, disproportions arise that carry long-term risks.
Political Changes and Economic Principles
Referring to political cycles, Asatryan notes that authorities can change, but the fundamental principles of economic policy have remained almost unchanged for many years. Therefore, in his opinion, it is necessary to think broadly about the economy’s development potential and focus on increasing efficiency.
“We need to talk not only about growth, but about efficiency. There is a lot to be done here,” concludes the former Central Bank Chairman.