High inflation rate is serious challenge also for 2011, says PM Sargsyan

Armenia saw a 9.4% inflation in 2010, which is a serious cause for concern, Armenia's Prime Minister Tigran Sargsyan said at the last cabinet meeting for this year.

According to him, this is a very high inflation figure for Armenia compared to that in neighboring countries.

"Because Armenia has always had a lower inflation rate that has not exceeded 3%. This high inflation figure is a serious challenge also for the next year," Sargsyan said.

However, Sargsyan said that the government managed to fully remain with the figures of the 2010 budget, adding at the same time, the 2011 is also going to be a tough one.

"This year was a rather tense and tough one for us. The 2011 too will be tough," said he, reminding of a 4.6% planned growth for the next year.

Due to adverse weather conditions in the recent years, the government is expecting to see economic growth not in agriculture, but in other sectors, he explained.

Further, Sargsyan said he was not satisfied with the 2.6% economic growth recorded in 2010, though only 1.2% growth had been projected.

According to him, the 2009-2010 figures are indicative of the fact that Armenia's economy is being diversified, and that the growth is achieved not due to agriculture and construction, but thanks to industry, neo technologies and infrastructures.

"We attached much importance to infrastructures, and this year the main investments have been made in this sector," Sargsyan said, referring to the construction of eight bridges and renovation of roadways (350km in total) in the country.

Sargsyan also expressed regret that due to bad weather conditions this year agriculture saw a significant decline which, in turn, seriously affected the macro-economic figures. The decline, according to him, contributed to high inflation rate.