Armenia’s Don Quixotes keep optimism for economic growth

/By AzerNews/

By Sara Rajabova

Though the economic situation in Armenia is deteriorating day by day with the rise in poverty, high rate unemployment, increasing external debt and emptying budget, the Armenian officials insistently keep their optimism for economic growth in the country.

Hovik Abrahamyan, Armenia’s prime minister, who undertook the task to overcome the economic crisis, said in the second half of 2015 the Armenian government will implement a number of projects for economic development of the country, Armenian media reported.

He attempted to assure that these projects will lead to "prosperity and the government will do everything to improve life".

On the question whether economic growth can be expected as a result of 2015, the Armenian prime minister said: “Definitely”. His statement appeared amid the country's poor economic indicators, which kills hope for any progress in the near future.

Some external factors, namely the recession in Russia, also show the obscurity of the nearest economic growth in Armenia.

The Armenian officials try to convince the society that the situation is not as bad as it seems from aside.

They even forecast the positive growth in Armenia in 2015. Vache Gabrielyan, deputy prime minister and international economic integration and reforms minister, said they expect a small but positive growth this year.

“The economic situation [in the country] is not the best, but it is stable,” he said.

The economic recession in Russia has consequently impacted all Russian related economies, especially Armenia that is heavily dependent on money transfers from its “big brother”.

Gabrielyan considers that Russia’s economic decline will not affect Armenia’s economy, because, in addition to Russia, Armenia exports products to several other countries.

“We have a more diverse geographical scope of exports; our export and import volumes are better. Of course, reduction in the flow of remittances to Armenia affects the economy, but there are certain products that are exported to numerous countries,” he said.

Remittances sent from overseas play a crucial role in Armenia's economy, sharing a significant bulk in the GDP - nearly 16-17 percent.

The sharp decline of money transfers as a result of downturn in Russian economy, in its turn, is accelerating Armenia's worsening economic situation.

Private remittances sent to individuals through the Armenian banking system declined by more than $162 million or by almost 35 percent in the first four months of 2015. .

The remittances to Armenia reduced from all countries. Increase in money inflow was fixed only in transfers from the U.S., which was up by 2.6 million or 33.9 percent in April. But this was a minor positive against the background of a collapse in the dynamics of large-scale remittances.

Decline in Russian remittances made 35.4 percent or $38.6 million, according to Armenian media.

Armenian officials seem clumsy to normalize the situation in the country. Just like its predecessors, Premier Abrahamyan also incapable to draw off the country from the miserable situation.

Abrahamyan has been given a tenure until the end of the year to fix the country’s economic situation, and try to find solutions to come out of the country’s “bankrupt” situation, Irates De Facto newspaper.

“Otherwise, there will be given new names of PMs—or a name—who will be able to save the situation,” the report said.