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“We have concluded 2016 with 0.2% economic growth, with a 2.2% growth targeted for the year,” Vardan Aramyan, Armenia’s Minister of Finance, noted at an extraordinary session convened by the National Assembly of Armenia on Thursday, while presenting the annual report on the “Execution of  State Budget of the Republic of Armenia for 2016”.

Mr. Aramyan said that the economic growth in 2016 was mainly driven by industry and service spheres. The 0.8 percentage point (pp) in the 0.2% economic growth was ensured by industry sector, with 1.9pp provided by services.

“Two branches, namely the agriculture and construction, negatively affected the economic growth in 2016. A 5.8% economic decline was recorded in agriculture sphere, with a 10.8% reduction registered in construction,” the minister said.

In Mr. Aramyan’s words, negative developments have been observed in the international commodity markets since 2011, which have also influenced Armenia. The minister also noted that an economic conflict erupted between Russia and Euro-Atlantic partnership, emerging into economic sanctions.

“Russia’s economy has a significant impact across the [Caucasus] region, therefore the war of the sanctions indirectly affected us. It is a known fact that the Russian economy has suffered decline starting from 2014, which impacted our country through remittances and demand for exports of Armenian products,” the minister added.

He also noted that the economic growth in the EU comprised for 1.95% compared with 2.36% growth recorded in the previous year, whereas the EU shares over 30-32 percent of Armenia's trade turnover. 0.1% economic growth was recorded in the EAEU, with 0.2% decline seen in the world economic growth.