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EBRD: ARMENIA NEEDS SUBSTANTIAL REFORMATION OF ITS BUSINESS CLIMATE
YEREVAN, March 6. /ARKA/. Armenia, which has no access to sea and
limited access to neighboring markets, needs substantial reformation
of its business climate, enhancement of competition and improvement
of physical infrastructures, the European Bank for Reconstruction
and Development (EBRD) said in its transition report for 2012.
According to the report, long-term growth prospects remain uncertain.
The country's economy, which is singled out for relatively high degree
of monopolization, remains reliant on export of raw materials with
low added value, which makes it vulnerable to shocks experiences by
its trade partners.
The EBRD stressed in the report that economic prospects for the
nearest future are overshadowed by uncertainty across the world,
and to retain economic growth close to 4% in 2012 and 2013, it will
be necessary that amounts of money transfers remain large and demand
from foreign partners, particularly Russia, as well as prices for
exported raw materials remain high.
The EBRD experts say in the report that recovery of Armenia's economy
after the recession has already speeded up and that the growth is
mainly propelled by mining and processing industries.
The country's unreformed agriculture recovered after the 2010 decline
thanks to a better weather and growth in money transfers.
Construction rallied as well after flagging in 2009.
The EBRD says in its report that the government continues efforts to
consolidate the budget for retaining the state debt at an acceptable
level under the IMF-supported program.
Growth in lending was considerable and it reflected a low level of
financial mediation.
External imbalances were downed, but current account adverse balance
remains high standing at 11% of GDP.
The EBRD experts single out the necessity of a breakthrough in
improvement of business climate among the 2013 top-priority objectives.
It is also necessary to stimulate domestic and foreign trade by
modernizing transportation and communication infrastructures, which
will spur development of export-oriented segments of the national
economy and will reduce implicit costs in dealings.
The EBRD also recommends the government to continue efforts for
development local capital markets.
The large-scale objective to de-dollarization of the economy should
be accompanied by a consistent transition of monetary policy from
actual conjunction with foreign exchange rate to inflation targeting.
The pension reform to be implemented by the government should
open strategic opportunities for development of domestic markets
of securities, bank deposits and equities thanks to institutional
investors' base, which ensures sustainable demand for long-term
investments. -0-
YEREVAN, March 6. /ARKA/. Armenia, which has no access to sea and
limited access to neighboring markets, needs substantial reformation
of its business climate, enhancement of competition and improvement
of physical infrastructures, the European Bank for Reconstruction
and Development (EBRD) said in its transition report for 2012.
According to the report, long-term growth prospects remain uncertain.
The country's economy, which is singled out for relatively high degree
of monopolization, remains reliant on export of raw materials with
low added value, which makes it vulnerable to shocks experiences by
its trade partners.
The EBRD stressed in the report that economic prospects for the
nearest future are overshadowed by uncertainty across the world,
and to retain economic growth close to 4% in 2012 and 2013, it will
be necessary that amounts of money transfers remain large and demand
from foreign partners, particularly Russia, as well as prices for
exported raw materials remain high.
The EBRD experts say in the report that recovery of Armenia's economy
after the recession has already speeded up and that the growth is
mainly propelled by mining and processing industries.
The country's unreformed agriculture recovered after the 2010 decline
thanks to a better weather and growth in money transfers.
Construction rallied as well after flagging in 2009.
The EBRD says in its report that the government continues efforts to
consolidate the budget for retaining the state debt at an acceptable
level under the IMF-supported program.
Growth in lending was considerable and it reflected a low level of
financial mediation.
External imbalances were downed, but current account adverse balance
remains high standing at 11% of GDP.
The EBRD experts single out the necessity of a breakthrough in
improvement of business climate among the 2013 top-priority objectives.
It is also necessary to stimulate domestic and foreign trade by
modernizing transportation and communication infrastructures, which
will spur development of export-oriented segments of the national
economy and will reduce implicit costs in dealings.
The EBRD also recommends the government to continue efforts for
development local capital markets.
The large-scale objective to de-dollarization of the economy should
be accompanied by a consistent transition of monetary policy from
actual conjunction with foreign exchange rate to inflation targeting.
The pension reform to be implemented by the government should
open strategic opportunities for development of domestic markets
of securities, bank deposits and equities thanks to institutional
investors' base, which ensures sustainable demand for long-term
investments. -0-