Armenia’s Finance Ministry this week has reported about an unprecedented 8.8 percent growth of the economy during the first five months of this year. Local television channels keep telling about an improving situation in the country, saying that the crisis is over and all this thanks to the government policies.

Independent economists, however, say that the Gross Domestic Product (GDP) growth is not the result of the government’s economic policy, but is related to the improvement of affairs on the world mining industry market.

Statistics also shows that the physical volume of metallurgic production in January-April 2008-2010 has increased by 9.7 percent in Armenia.

The largest growth during these five months has been reported in the export sector – 64.5 percent, but the bulk of exports is composed of mining industry products. Aristomene Varoudakis, the head of the World Bank’s Yerevan office, noted that the largest share of the shadow sector is in the field of the mining industry.

Macroeconomic showings have indeed grown in January-May, as compared with the same period last year, GDP grew by 8.8 percent. But some local economists and international experts argue that reliance on big business still remains the weakness of the Armenian economy, which contains the development of small and medium-sized enterprises (SME). The government acknowledges this fact and promises to encourage SMEs, but the matter does not go further than declarations.

Total incomes from sales of the largest 344 taxpayers of the country in January-April this year showed an 11.5-percent increase as compared to the same period of last year, standing at a little more than 1.5 billion in absolute figures.

The total amount of their taxes has increased by 13.6 percent. This means that big business is thriving, especially in the sector of commodity import and retail trade. Last year, 136 major retail enterprises contributed more than 52 percent of the total turnover of all stores countrywide. A number of small shops in January-March this year, compared with an average annual index in 2009, decreased by 1,700.

But prices do not stop growing, and this means that the standard of living of the population is declining. The consumer price index in January-May 2010, as compared to the same period last year, increased by 7.6 percent. Against last December this index rose by 4.2 percent and in May it totaled 5.3 percent. Rising prices for the “rent, fuel and electricity” group was 13.8 percent. Foodstuff prices in January-May this year increased by 5.5 percent, prices for clothing and footwear have grown by 11.4 percent, for medical care and medicines - by 8.8 percent.

According to the data for the first quarter of this year, the cost of a minimum food basket in Armenia is 20,457 AMD or $53.