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ARMENIA'S ECONOMIC DECLINE CONTINUES
Ruben Meloyan
Liberty
http://www.azatutyun.am/content/a rticle/1783079.html
July 22 2009
Armenia
Armenia's economy has continued to decline for the sixth consecutive
month this year, according to the preliminary data released by the
National Statistics Service.
The data show the country's Gross Domestic Product contracting by
16.3 percent in the first half of this year. The Armenian economy
contracted by 15.7 percent in January-May 2009. It was growing at
double-digit rates as recently as in September, just before the
outbreak of the global financial crisis.
The economy was primarily dragged down by the construction slump,
which was down by as much as 54.5 percent in January-June from the
same period of 2008. The more-than-threefold month-on-month growth
reported in Armenia's once booming construction sector in June did
not resulted in a dramatic reversal of macroeconomic statistics.
Prime Minister Tigran Sarkisian told the Kapital business daily that
the deepening of the economic decline in the first half of the year
was not an unexpected development for the government.
"We have said before the publication of the figures that a high
economic growth was registered during the six months of last year,
as a result of which the decline during the same period of this year
would be steep," said Sarkisian.
Earlier this month Sarkisian said that he saw at least three scenarios
of developments for the economy in 2009 and did not exclude that the
economy could contract by as much as 20 percent this year.
"From now on, we need to consider at least three scenarios of
developments," Sarkisian said during an international economic forum
in Yerevan on July 7. "One is that we will have a [GDP] decline
of 9.5 percent; the second one is that it will make up 16 percent;
and the third one is that we will have a 20 percent decline."
According to former Central Bank Chairman Bagrat Asatrian, the
continuing decline in Armenia's economy reveals the ineffectiveness
of government actions.
"Today we bear the consequences of the failure of the government
to make decisions in the middle of last year. The government must
apologize that we now live by a program that envisages a 9 percent
economic growth," Asatrian told RFE/RL.
The economist, however, said the economic decline could slow down by
the end of the year.
"One of the factors is the inflow of large financial means, which
will somewhat redress the situation in construction," said Asatrian,
predicting an overall economic decline in 2009 at 13-14 percent.
According to the data reported for the first six months of 2009,
imports exceeded exports in Armenia almost five times and the negative
balance of trade totaled more than $1 billion.
Asatrian called the situation 'alarming', considering the sharp
increase of Armenia's foreign debt in the past several months.
"As a result of this year we will have a foreign debt that will exceed
our exports about three or four times. This is already a terrible
thing. In fact, we are supposed to clear our debts by borrowing. We
may borrow from foreign countries or from our compatriots abroad in
the form of cash remittances. These remittances, however, are not
money that we earn," said Asatrian.
Artur Stepanian, head of the Central Bank's Monetary Policy Department,
said that forecasts about a tangible reduction of cash remittances
were made still last year.
"At the end of last year and at the beginning of this year we assessed
that a 30 percent reduction in cash remittances would take place. The
forecasts that we made about seven months ago have come true," he said.
Stepanian also said that a large decrease in direct capital investments
has caused steep declines in both construction and industry.
"The economic has hit the bottom and after staying at this level for
a month or two it will enter the stage of recovery," Stepanian said.
Ruben Meloyan
Liberty
http://www.azatutyun.am/content/a rticle/1783079.html
July 22 2009
Armenia
Armenia's economy has continued to decline for the sixth consecutive
month this year, according to the preliminary data released by the
National Statistics Service.
The data show the country's Gross Domestic Product contracting by
16.3 percent in the first half of this year. The Armenian economy
contracted by 15.7 percent in January-May 2009. It was growing at
double-digit rates as recently as in September, just before the
outbreak of the global financial crisis.
The economy was primarily dragged down by the construction slump,
which was down by as much as 54.5 percent in January-June from the
same period of 2008. The more-than-threefold month-on-month growth
reported in Armenia's once booming construction sector in June did
not resulted in a dramatic reversal of macroeconomic statistics.
Prime Minister Tigran Sarkisian told the Kapital business daily that
the deepening of the economic decline in the first half of the year
was not an unexpected development for the government.
"We have said before the publication of the figures that a high
economic growth was registered during the six months of last year,
as a result of which the decline during the same period of this year
would be steep," said Sarkisian.
Earlier this month Sarkisian said that he saw at least three scenarios
of developments for the economy in 2009 and did not exclude that the
economy could contract by as much as 20 percent this year.
"From now on, we need to consider at least three scenarios of
developments," Sarkisian said during an international economic forum
in Yerevan on July 7. "One is that we will have a [GDP] decline
of 9.5 percent; the second one is that it will make up 16 percent;
and the third one is that we will have a 20 percent decline."
According to former Central Bank Chairman Bagrat Asatrian, the
continuing decline in Armenia's economy reveals the ineffectiveness
of government actions.
"Today we bear the consequences of the failure of the government
to make decisions in the middle of last year. The government must
apologize that we now live by a program that envisages a 9 percent
economic growth," Asatrian told RFE/RL.
The economist, however, said the economic decline could slow down by
the end of the year.
"One of the factors is the inflow of large financial means, which
will somewhat redress the situation in construction," said Asatrian,
predicting an overall economic decline in 2009 at 13-14 percent.
According to the data reported for the first six months of 2009,
imports exceeded exports in Armenia almost five times and the negative
balance of trade totaled more than $1 billion.
Asatrian called the situation 'alarming', considering the sharp
increase of Armenia's foreign debt in the past several months.
"As a result of this year we will have a foreign debt that will exceed
our exports about three or four times. This is already a terrible
thing. In fact, we are supposed to clear our debts by borrowing. We
may borrow from foreign countries or from our compatriots abroad in
the form of cash remittances. These remittances, however, are not
money that we earn," said Asatrian.
Artur Stepanian, head of the Central Bank's Monetary Policy Department,
said that forecasts about a tangible reduction of cash remittances
were made still last year.
"At the end of last year and at the beginning of this year we assessed
that a 30 percent reduction in cash remittances would take place. The
forecasts that we made about seven months ago have come true," he said.
Stepanian also said that a large decrease in direct capital investments
has caused steep declines in both construction and industry.
"The economic has hit the bottom and after staying at this level for
a month or two it will enter the stage of recovery," Stepanian said.