Friday, December 29 2023 10:57

ArmInfo.  Prime Minister Nikol  Pashinyan visited the Central Bank to participate in the reception  organized on the occasion of the upcoming New Year and Christmas.

The event was attended by President of the Republic Vahagn  Khachaturyan, Deputy Prime Ministers Mher Grigoryan and Tigran  Khachatryan, Chief of Staff of the Prime Minister Arayik Harutyunyan,  Chairman of the Central Bank Martin Galstyan, Cabinet members, MPs,  representatives of the Central Bank and financial-banking system.

Prime Minister Pashinyan made a speech in which he stated:

"Dear representatives of our banking system,

I greet everyone and I am happy to see you. I must record that the  Central Bank, and the banking system in general, is obviously one of  the most important institutions of our state. Since 2018, the  government's policy has been as follows: we must provide proper  conditions to ensure the institutional independence of the Central  Bank. And we have consistently pursued this policy, which did not  mean a break at all, because, in fact, representatives of the Central  Bank participate in all our strategy discussions, all conceptual  discussions, but at the same time, we made a decision, an obvious  decision, which had been the subject of discussion in Armenia for a  long time, that the institutional separation of functions should be  fully ensured.

I am sure that this is also the reason why we, having gone through  very severe shocks, have been able to ensure macroeconomic stability,  because the Armenian government, of course, has and expresses its  positions and approaches on all issues, but the government has never  crossed institutional lines and relies on the institutional capacity  and responsibility of the Central Bank. I think this decision has  justified itself.

And, indeed, in our financial market, there were complications  related to the general macroeconomic environment, but it is also due  to this approach that we were able to make a precise division of  labor, everyone did his job, as a result of which macroeconomic  stability was ensured in the most critical period, after which we  have been successfully providing high economic activity and growth  for several years. And, as a matter of fact, according to the  calculations of the Central Bank, more than 28 percent economic  growth has been ensured in Armenia since 2018.

I want to emphasize that in general the banking system operates in an  environment without political pressure. And this is also something  that I think is good, it should be just like that, but on the other  hand, I think it should also be recorded, because these nuances that  are not noticed, are not recorded, they provide a background for the  stability of macroeconomic, financial markets. And when we combine  all this with the environment of high economic growth, we see that  our banking system also has impressive indicators, in particular, as  of November 2023, the total deposit portfolio of the banking system  of Armenia registered a record-high indicator of 5 trillion 619  billion 277 million AMD. It is very important that the growth is  sustainable and continuous. This indicator exceeds the October  indicator of this year by almost 84 billion AMD, 1.51 percent, and  exceeds the indicator of the same period of 2022 by 13.46 percent,  and compared to 2018, the deposit portfolio has almost doubled, the  growth is over 95 percent.

The total credit portfolio of our banking system has also registered  a record-high indicator: as of November, 5 trillion 365 billion 604  million AMD, which is again 2.2 percent higher than the October  index, 21.3 percent higher than the November index of last year, and  compared to November 2018, more than 57 percent. I think it is  important to record that the total deposit portfolio exceeds the  total credit portfolio by 253 billion AMD, which is a very important  guarantee of the stability of the banking system.

I would like to raise one or two more facts. As of November 30 of  this year, the number of customers of the banking system was 4  million 442 thousand 950 people, which increased by 19.3 percent  compared to 2022, and 65.7 percent compared to 2018. As of September  30, the total number of customer accounts of the banking system was 8  million 995 thousand 422, which in is 22 percent more than 2022, and  78 percent more than 2018.

These indicators are impressive and along with the decisions on  capital increase that the Central Bank President mentioned, the  opportunities for stability of our banking system has increased to a  certain extent, which is a very important circumstance for increasing  the potential of economic growth. The fact that the deposit portfolio  is much larger than the loan portfolio also gives hope that the  banking system still has some potential to contribute to at least 7  percent economic growth next year. Here, our business sector, the  real sector, should focus on the quality of the programs to also  generate interest in the banking system.

I want to congratulate all of us on the occasion of these indicators  and also thank the people who have made an effort to get us into the  zone of green indicators. And, of course, this is not the peak of our  capabilities, our first task is to ensure stability and the second  task is to realize the potential that exists in the economy and  banking system. The government tends to promote that policy.

I also want to emphasize that we have been implementing certain  social programs in recent years with the hope that the our partners  from the banking system will support and actively participate. I  would like to thank all the banks that responded to the social  programs of the government during this period and expressed practical  and moral support. This is an important partnership.

I also think that on the other hand, we see new manifestations in our  economy, which we also need to promote, which are related and not  related to the banking system. We see that there are certain trends  of activation in the stock market. I remember that in 2018-2019 we  were discussing how important branch it is in the macroeconomics, and  I am glad that there is some movement here as well. Of course, banks  and the banking system are still the main actors here, both in the  role of issuer and buyer, but I think it is what it should be like.  We have no other expectations for reviving the market, to give it a  start, it is important for us that this mechanism starts working.  When the work of that mechanism also becomes sufficiently reliable, I  think we will see new players there.

Dear attendees,

Dear representatives of the banking system,

I thank all of you for the work done in 2023, and of course, I am  sure that we are all motivated to ensure high economic growth in the  Republic of Armenia in 2024 like in the pervious years. For this, of  course, the effective work of all branches of government is  necessary, but also the Central Bank and the banking system obviously  have a very significant role on the way of solving this political  task.

I thank you for this readiness and motivation, so that next year,  when we gather here, the indicators of not only the banking system,  but also the macroeconomic indicators of Armenia, in general, will be  in the green zone and we will all feel satisfied with our work. I  wish you and all your families a Merry Christmas and a Happy New  Year."