Expert: 2016 will show day-to-day realities of economic crisis, it will be difficult year for Armenia in social-economic context

ArmInfo. "2016 will be a difficult year for Armenia in social-economic context and collection of taxes. Possibly we are at the threshold of the realities of 2009", economist Babken Tunyan expressed this opinion at a press conference on January 18.

Referring to the forecast of the World Bank, he noted that economic downfall in Russia by 1% influences Armenia's GDP fall by 0.8%.  "Influence of Russian ruble's instability is very significant. But there is another problem. Armenia is too dependent from external factors, and a huge work of many years is needed to get independent from these factors", Tunyan noted, adding that even in case of stagnation forecast for Russian economy, Armenia would have 4.8% economy growth.

According to him, reasonable use of domestic resources will help Armenia's economy to decrease external influence. Tunyan noted as one of the priority reasons not Ruble depreciation but absence of political will for making strategic decisions. In this context the expert noted that internal political situation should be normalized first of all.

Referring to the relatively weakening of Russian ruble, he mentioned that there will be more decline of transfers, which in his opinion will bring to migration of seasonal workers from Russia.  "According to the latest data, transfers from Russia to Armenia declined to almost 1.5 bln USD in Jan-Nov 2015. "If the economic situation in Russia does not improve further decline of transfers will be registered ", the economist stated.

To note, World Bank forecasts a 2.2% GDP growth for Armenia in 2016.  Compared to 2015 World Bank forecasts insignificant slowdown of economic growth from 2.5%. International Monetary Fund changed the forecast on Armenia's economy growth in 2015 from stagnation to 2.5% growth with further slowdown by 2.2% in 2016. EBRD improved the forecast on Armenia's GDP dynamics in 2015 from 1.5% decline to 2.3% growth with slowdown of growth to 2% in 2016. The Central Bank of Armenia has upgraded its economic growth forecast for Armenia from the previous 2.8- 3.6% to 3.2-3.9%, according to the CBA's monetary policy program for Q4 2015.  In 2016, the economic growth will slow down to 1.6-2.7%.

According to the National Statistical Service of Armenia, in Jan-Nov 2015 as compared to the same period of 2014, economic growth in Armenia fell from 3.8% to 2.9%.  Foreign trade turnover of Armenia in the same period decreased by 20.6% year over year, particularly export dropped by 4.7% and import by 26.2%.  Transfers of physical entities from Russia to Armenia declined in Jan-Sep 2015 by 38% yoy to 750 mln USD.  As a result share of Russian transfers in the overall inflows declined from last year's 75% to reported 63%. This led to decline of total inflow of transfers to Armenia by 27% to 1.2 bln USD.