<h4><strong><a href="http://www.armenianow.com/economy/35737/wb_armenia_2012_economic_growth">ArmeniaNow</a></strong></h4><h4><strong></strong></h4><p>February 17, 2012</p><p>Head of World Bank (WB) Yerevan office Jean-Michel Happi stated on Friday, that according to their predictions in 2012 the economic growth of Armenia will be 4.2 percent. This is progress as compared to last year&rsquo;s three percent growth; nevertheless, experts forecast serious challenges of Armenia&rsquo;s &ldquo;economic collapse and default&rdquo;.&nbsp;</p><p>Last year, Happi predicted almost a 5- percent economic growth for Armenia in 2012, however now he notes that &ldquo;In 2012, the world economy will slow down, which cannot but have its negative influence upon the economies of developing countries.&rdquo;&nbsp;<br style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; " /><br style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; " />Early this week Policy Forum Armenia (PFA) announced the publication of a Special Report on &ldquo;Armenia: Averting an Economic Catastrophe&rdquo; which is about Armenia&rsquo;s economic problems. The report presents all the economic-political challenges that Armenia faces now.&nbsp;<br style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; " /><br style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; " />&ldquo;Unless drastic changes in the economic policy direction and political-economy landscape are carried out, within the next three years, Armenia will be forced to undergo a large and painful devaluation of its currency, the dram, and/or an external sovereign debt restructuring or default,&rdquo; the report reads.<br style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; " /><br style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; " />PFA experts warn that since the collapse in 2009 the rapid rise in state debt of Armenia makes 40 percent of Armenia&rsquo;s gross domestic product (GDP), which &ldquo;has approached the limit of debt default for developing countries&rdquo;. Meanwhile, &ldquo;the policy of factual fixed exchange rate adopted by the Central Bank resulted in loss of three-quarters of the external reserves.&rdquo;<br style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; " /><br style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; " />The report says that the extremely poor state of the economy is connected with &ldquo;inner political will landscape and not with lack in resources or unfavorable geographical problems.&rdquo;&nbsp;<br style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; " /><br style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; " />&ldquo;The elements of the same crony capitalist practices&mdash;where a select few have used their disproportionate access to power and influence over economic decision-making for their personal gain&mdash;have been reinforced, at the expense of growth, public health, education, and national security. This is not only immoral but in many ways also illegal and needs to change. Armenia&rsquo;s window of opportunity to build a viable economy and address its severe social and demographic problems is closing rapidly,&rdquo; the authors of the report warn.&nbsp;</p>