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Armenia's ex-President criticizes authorities' economic policy

24 March 2010 [10:23] - TODAY.AZ
“True, economic crises take place from time to time. One should be mindful of and prepare for that during good years. But not by restraining economic development but by accumulating reserves, cutting the state debt and budget deficit, diversifying trade and so on. And that’s what we did,” former Armenian President Robert Kocharyan said.

According to him, in 1998-2008 under his presidency GDP/external debt ratio reduced from 46 percent to 13 percent.

He also noted that budget deficit totaled less than 2 percent in last years of his presidency, whereas average annual inflation made 2-4 percent with 12-13 percent economic growth.

Simultaneously, budget financing in 2007 made only 7 percent of capital construction.

Gold stock was constantly renewed. In 2008 clear balance of finance ministry totaled AMD 100 bn.

“Ideal macroeconomic situation proves that country spent less than earned, saving part of its funds ‘for a rainy day’,” he underlined.

Kocharyan considers that this opportunity enabled new the authorities to spend savings and obtain new credits for the implementation of anti-crisis programs.

"Imagine what the government had to do in case external debt totaled for instance 40 percent of GDP instead of 13 percent before the crisis. Naturally, no one would allocate Armenia such amounts as it would inevitably lead to default,” he added.

Former President considers that it is possible to prevent recession in construction sector, stressing that it is necessary to consolidate efforts to maintain housing demand.

"I think the government now understands that. It was extremely important to start that in advance, when crisis was only beginning to move towards Armenia,” Kocharyan noted.


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