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IMF REPRESENTATIVE'S OPTIMISM MADE SOME ARMENIAN ECONOMISTS ANGRY
December 18 2014
"The more deteriorated is the economic situation in the world,
the happier in Armenia. Did I understood correctly of what you
said? You said that you have excessively great opportunities; like
the Central Bank, so as the government, in particular, talked about
the serious fiscal consolidation in our country. Which is it that
we do not manage to know?" asked economist Vardan Bostanjyan to IMF
Resident Representative Teresa Sanchez after her observations. Another
participant asked how fundamental are the media reports that some
Russian companies and banks buy dollar in great quantities and
transfer to Russia, because it is more expensive to buy in rubles in
Russia. What mechanisms shall the government apply to prevent it? IMF
representative preferred to answer to these and other questions in
general rather than one by one, "You misunderstood me, I did not
mean that the situation in the world is bad, while in Armenia it is
not so bad. Simply, at this moment, the situation in Armenia is not
so complicated as in a number of other countries. Approximately one
percent decline in the economy will be registered in Russia and 6% in
Ukraine. Armenia's economy is still growing, it's true that it is low
of the potential level, but our goal is to assist Armenia to record an
economic growth next year under the present conditions," said Teresa
Sanchez. She said that the fiscal consolidation data are available,
because during the previous crisis, the budget deficit sharply
increased, now, it is quite low and is about 2 percent of GDP. "Now,
let's qualify it like that. Let's call it a consolidation, regardless
that there is no investment in our country, no activity is conducted,"
interrupted Vardan Bostanjyan. IMF representative continued, "I did
not say such a thing, what I am saying is that given the consolidation
or deficit reduction, now, we have the opportunity, if necessary,
to increase this indicator." Vardan Bostanjyan again interrupted,
"I would oppose that you said that the budget will be performed by
100 percent, forty percent of the budget depends on the dollar. With
regard to dollar fluctuations, how are they going to perform the
budget by 100 per cent?" Teresa Sanchez continued, "It is a serious and
important concern, I understand it, but the fact that the majority of
capital expenditures is financed by international organizations and the
funding is in dollars, it is already a problem, but on the other hand,
the debts that are involved by international organizations are made at
privileged conditions. If the situation further worsens, Armenia has
the support of international organizations." Some economists present
in this discussion were dissatisfied with the IMF representative's
optimistic assessments, and some of them left the discussion still
unfinished.
Arpine SIMONYAN
Read more at: http://en.aravot.am/2014/12/18/168214/
From: A. Papazian
December 18 2014
"The more deteriorated is the economic situation in the world,
the happier in Armenia. Did I understood correctly of what you
said? You said that you have excessively great opportunities; like
the Central Bank, so as the government, in particular, talked about
the serious fiscal consolidation in our country. Which is it that
we do not manage to know?" asked economist Vardan Bostanjyan to IMF
Resident Representative Teresa Sanchez after her observations. Another
participant asked how fundamental are the media reports that some
Russian companies and banks buy dollar in great quantities and
transfer to Russia, because it is more expensive to buy in rubles in
Russia. What mechanisms shall the government apply to prevent it? IMF
representative preferred to answer to these and other questions in
general rather than one by one, "You misunderstood me, I did not
mean that the situation in the world is bad, while in Armenia it is
not so bad. Simply, at this moment, the situation in Armenia is not
so complicated as in a number of other countries. Approximately one
percent decline in the economy will be registered in Russia and 6% in
Ukraine. Armenia's economy is still growing, it's true that it is low
of the potential level, but our goal is to assist Armenia to record an
economic growth next year under the present conditions," said Teresa
Sanchez. She said that the fiscal consolidation data are available,
because during the previous crisis, the budget deficit sharply
increased, now, it is quite low and is about 2 percent of GDP. "Now,
let's qualify it like that. Let's call it a consolidation, regardless
that there is no investment in our country, no activity is conducted,"
interrupted Vardan Bostanjyan. IMF representative continued, "I did
not say such a thing, what I am saying is that given the consolidation
or deficit reduction, now, we have the opportunity, if necessary,
to increase this indicator." Vardan Bostanjyan again interrupted,
"I would oppose that you said that the budget will be performed by
100 percent, forty percent of the budget depends on the dollar. With
regard to dollar fluctuations, how are they going to perform the
budget by 100 per cent?" Teresa Sanchez continued, "It is a serious and
important concern, I understand it, but the fact that the majority of
capital expenditures is financed by international organizations and the
funding is in dollars, it is already a problem, but on the other hand,
the debts that are involved by international organizations are made at
privileged conditions. If the situation further worsens, Armenia has
the support of international organizations." Some economists present
in this discussion were dissatisfied with the IMF representative's
optimistic assessments, and some of them left the discussion still
unfinished.
Arpine SIMONYAN
Read more at: http://en.aravot.am/2014/12/18/168214/
From: A. Papazian