Tuesday, April 10 2012 15:06
Prime Minister of Armenia: Peculiarity of crisis in Armenia is the fact that our banking sector was prepared to such development of events better than other CIS countries
ArmInfo. The peculiarity of the crisis in Armenia is the fact that our banking sector was prepared to such development of events better than other CIS countries, Prime Minister Of Armenia Tigran Sargsyan said in an interview with the RBK agency when asked how Armenia overcame consequences of the world financial crisis.
He said that the reform in the banking sector ended earlier than in other countries and there was no "hot" money in the banking sector of Armenia. "The control was very strong and the public reports of banks met reality. There were no bad assets, the liquidity was kept at a very high level, and unlike Kazakhstan, Russia and Ukraine where "hot" money was attracted from the world financial markets, the first wave of the world financial crisis went around us thanks to such a situation. The crisis touched Armenia with its second wave - through the real sector. This was first of all connected with the situation in Russia as the economic situation of your country affects the economic situation of Armenia much because of several reasons. First of all, the share of the Russian companies in the real sector is very high. The second aspect is connected with investments as the main investments in Armenia are from Russia, and of course worsening of the situation results in decreasing of the investment flow. The third factor - are private transfers. Many Armenian citizens have been working in Russia and about $1 bln of private transfers per year are of a great significance for Armenia. These three factors affected the economic situation in Armenia and first of all the building sector. The building sector was the key engine of the pre-crisis growth, which fixed not less than 20% of economic growth every year. The share of the building sector in the gross national product reached up to 20%. This is an inadmissible luxury as dependence of one sector weakens our position very much and results in decrease of the diversification level. This happened in 2009. We fixed dropping by 42% in the building sector, and this led to worsening of the macro-economic indices. But in 2010 we had economic growth by 2%, and in 2011 - by 4,6%. We have been watching gradual restoration. The main lesson of the crisis is: it is necessary to draw more attention to the industrial policy, to diversify the structure of the gross national product and to make reforms in the real sector with faster rates", - Sargsyan said.
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