TODAY.AZ / Analytics

Existing economic indices disprove Armenian government's activity

26 February 2015 [13:26] - TODAY.AZ

/By AzerNews/

By Mushvig Mehdiyev

Economic indices in Armenia this January have disproved claims made by the Armenian government that its officials have worked to promote the country's economy after it was subjected to aggravated difficulties over the past year.

Experts have claimed that the government's "invisible policy" which aimed to better the economy and promote growth has brought no tangible results so far, especially in view of the recent export slump.

According to data published by the National Statistical Service, this January, inflation has risen to 4.3 percent and sales have dropped by 7.4 percent. The industrial production also witnessed a drop of 6.3 percent in volume.

"Compared to last year, this January’s indices are upsetting, and this is a process that started from last October-December, and is conditioned by the Russian crisis and the vulnerability of our economy,” Hayk Gevorgyan, an economic analyst, said.

According to further data, Armenia's economy saw its foreign trade turnover drop by 30 percent and its export dropped by 22 percent.

Gevorgyan has linked such negative indices to Russia's ongoing economic crisis.

"The NSS indices are preliminary, its report does not specify which sectors of the export industry precisely declined and for which goods. That being said the main reasons behind today's economic stagnation is the devaluation of the Armenian dram and the Russian ruble. Furthermore the exporters are still waiting for new export regulations to get rid of ongoing difficulties," he noted.

The Russian market is becoming less and less appealing to Armenia, believes Gevorgyan. He explained that it is mostly because of the exchange rate, more precisely the devaluation phenomenon which has hit the Armenian dram by an 18 percent drop of its value. The Russian ruble loss 100 percent of its previous value. The other factor paralyzing the Armenian export is the decline of Russia's purchasing power," Gevorgyan noted.

At the same time, Armenia may have lost a part of its export capabilities, as its exports to the Eurasian Economic Union countries are registered as internal trade since the start of the membership.

Vilen Khachatryan, another local economist, said that prices for exported goods will rise in Armenia amid warnings that Russia will be hit by super- inflation.

Meanwhile, the Russian central bank announced that the rate of inflation could surpass 15 percent this year.

Khachatryan believes that if the economic growth falls by 6 percent in Russia this year, Armenia will follow the same economic fate.

Armenia failed to get positive economic growth forecasts from the international rating agencies for 2015.

Fitch and Moody's have downgraded their outlooks one Armenia's economic growth, while the European Bank for Development and Reconstruction has even annulled its Armenian economic forecast this year.


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