On September 29, IMF Resident Representative in Armenia Guillermo Tolosa said that the Armenian economy is slowly recovering from a sharp downturn of over 14% last year.

While trade and remittances are reviving industry and services, agriculture has been hit hard by adverse weather conditions, Guillermo Tolosa told a press conference in Yerevan.

“As a consequence, overall economic activity is expected to grow by about 4% in 2010 and 4.5% in 2011,” he said.

Guillermo Tolosa added that reflecting the recovery in economy, credit has also begun to flow to the country’s private sector.

The contraction of agricultural output, together with the spike in imported wheat prices, has translated into higher food prices. With nearly half the weight in the consumer price index, higher food prices have pushed annual inflation to 9.6% in August. “Looking ahead, inflation is expected to moderate and decline to about 7% by the end of this year,” said Guillermo Tolosa.