Armenian experts: Our economy fades

By Azernews

By Rashid Shirinov

More and more Armenian economists acknowledge that the country’s economy is in deep crisis and the situation is getting worse and worse day by day.

The public debt of this poor South Caucasus nation hit $5.35 billion by late June, $4.47 billion of which formed the external debt and $875 million – the internal. In one month, the total debt of the country rose by 1.3 percent, according to the National Statistical Service of Armenia. Recent months also witnessed acceleration in the growth of domestic debt.

The majority of Armenian external debt accounts for the government, the rest belong to the Central Bank of the country. But the greater part of the domestic debt is the bonds acquired by Armenian residents. By late June 2016, gross international reserves of Armenia made up only $1.57 billion.

The budget deficit, which became unprecedented in 2016, makes up approximately 4 percent of the GDP, and the service of such deficits is carried out mainly at the expense of the national debt: funds are borrowed, and then directed to the implementation of national expenditure, in particular to the social sphere. “In the end, these costs are used for consumption and do not contribute to the development of the economy,” Armenian economist Mesrop Arakelyan said.

The economist stresses public debt of Armenia is the matter of concern as the country takes loans only to cover current expenses.

Along with the growth of external debt, individual transfers from abroad to Armenia continue to decline. According to the reports of Central Bank of Armenia, in June 2016, the influx of transferred money volumes amounted to $135.3 million, while this figure was $163.2 million for the same period of 2015.

Economist Gor Tsaturyan revealed that in 2015 the transfers decreased by 28-30 percent, and further by 8-9 percent this year. As for economic growth, there is no positive trend, and recently declared indicators of economic growth are just made-up numbers, Tsaturyan believes.

Professor Vardan Bostanjyan, in turn, claimed that that the Armenian economy is in a comatose state: “Inefficient use of natural resources does not bring any income to the state, and selective enforcement of laws leads to new problems for entrepreneurs.”

The economist believes that the problem lies in the control system of Armenia, which facilitate monopolization in the country and needs fundamental changes.

They agree that the economic indicators of Armenian economy are miserable and no longer show signs of ‘life’.