During recent events in Armenia, banking system did not feel large outflow of fund

ArmInfo.During the recent events in Armenia, a major outflow of fund in the banking system of Armenia was not recorded. On May 30, during the presentation of the Central Bank's report on financial stability, the head of the Central Bank's financial stability and development department Andranik Grigoryan told journalists.

"Our system was able to withstand the development of events, than it proved its independence. Having used the necessary tools, we managed to ensure the financial stability of the banking system, "he stressed.

Outflow, according to Grigoryan, in this period there was a place, but these were the agreements of depositors with small deposits, and those that can not make long-term decisions or as a result of changes can easily panic. <However, the amount that left the banks again in the same volume returned after a few days>, - he said. According to the expert, such a reaction of depositors was due primarily to high confidence in the financial system. "At that time, little was said about the financial system. There were no negative expectations. It should be noted that when the client expressed a desire to withdraw its investments, the bank immediately performed the operation, immediately issuing cash. Our banks are always ready to pay customers money. This has already happened historically, as the banking system of the country is sufficiently capitalized and liquid, "he explained, noting that deposits continue to grow today, which indicates a high level of citizens' trust and the stability of the financial system.

Speaking about further forecasts, the banker noted that the expectations are more than positive. "Growth has already been fixed both on deposits and loans, especially for individuals who are indicators," he stressed, noting that he does not see any threats to the financial stability of Armenia's banking system.

According to the Central Bank's Financial Sustainability Report, economic growth in Armenia in 2017 was 7.5%. Moreover, the industrial sector showed an increase of 10.6%, services - by 10.2%, the construction sector out of the recession by 3.1% growth, and agriculture showed a decline of 4%. In 2017, inflation was 2.6%. Foreign trade turnover grew by 26.9% per annum in 2017, in particular, exports - by 19.7%, and imports - by 26.8%. High import growth rates increased the trade balance deficit to $ 1.545 billion or 13.4% of GDP (against 9.5% in 2016). The ratio of the current account deficit to GDP increased from 2.2% in 2016 to 3.5% in 2017. Nominal wages grew by 3.3% in 2017 against growth by 2.3% in 2016, namely in the private sector - by 4.1% (against 5% in 2016) and in the public sector - by 0.8% ( against the 1.2% decline in 2016). The unemployment rate declined by 0.2 percentage points in 2017 to 17.8%. In the next three years, wage growth will fluctuate in the range of 6-7%, and the unemployment rate is projected to decline by 0.3-0.5% annually. The growth of private transfers in 2017 was 16.5%, and according to the Central Bank forecasts, the growth trend of remittances will continue in 2018.

According to report of the Central Bank, in 2017 the growth rates of gross demand accelerated, mainly due to the growth of domestic demand. Private consumption grew by 7.7%, and investments by 10.1%, helped by the recovery of the economy's lending rates, the duration of growth trends in private transfers, and the growth in external demand. As part of the solution of the problem of stabilizing the public debt and its more efficient management, from the beginning of 2017, a restrained fiscal policy was pursued simultaneously with ensuring moderate growth of state investments and consumption. The recovery of domestic demand and the duration of lending conditions allowed to increase credit investments in 2017 by 8.7%. Moreover, the greatest support for growth in lending was provided by the increase in consumer credits, financing of industry and trade. The growth of the loan portfolio was accompanied by an improvement in its quality, in particular, the share of non-performing loans and receivables amounted to 5.1% in 2017, having decreased by 1.7 percentage points on an annual basis. A greater proportion of substandard loans was concentrated in such sectors as public catering and services, construction and agriculture. Deposits of resident individuals in the banks of Arenia increased by 16.9% in 2017, with the highest growth recorded for AMD deposits, but nevertheless, the share of dollar deposits remains high. The ratio of loans to deposits decreased by 2.5 percentage points in 2017, making 77.5%. In 2017, the Central Bank carried out an expanded monetary and credit policy, reducing the refinancing rate in February from 6.25% to 6% and maintaining this level to this day. The total turnover of purchase and sale of securities in the regulated market amounted to 96.2bln AMD in 2017, in their structure the lion's share fell on state bonds - 67.7%, and corporate bonds and shares accounted for 19.8% and 12.5%, respectively.

In the foreign exchange market, according to the report of the Central Bank, the exchange rate fluctuations were relatively low in 2017 (December to December 2016): to the euro, the devaluated devaluation by 12.2%, to the dollar almost did not change, and to the ruble weakened by 5.8%. The real effective exchange rate was devalued by 4.6% for the year under review and the nominal effective rate by 1.6%, mainly due to the strengthening of the currencies of the partner countries. The turnover of the currency market in 2017 was about 5 trillion drams, with the lion's share being intra-bank operations. It is noteworthy that the historically sharp increase in the volume of intra-bank foreign exchange transactions is recorded in December.

The ratio of assets of the financial sector to GDP and credits to GDP amounted to 91.4% and 49.8% respectively in 2017. The banking sector accounts for 85.5% of the assets of the entire financial system. According to the banking system, the ratio of assets to GDP and credits to GDP was 78.2% and 45.1%, deposits to GDP and money supply to GDP, respectively - 44.2% and 46.7%, respectively. The total capital of the banking system grew by 4.9% in 2017 (due to replenishment of the statutory fund and increase in profits), and assets increased by 9.2%, resulting in a decrease of leverage of 0.6 percentage points to 15.7%. The norm of the capital adequacy of banks decreased in 2017 to 18.6%, regulatory capital increased by 8.7%, ROA and ROE rose slightly - to 1% and 6%, respectively, the norms of total and current liquidity decreased to 32.1% and 141 , 7%.

To note, according to forecasts of the Central Bank of Armenia, GDP growth in 2018 will be 4.7-5.8%. The Central Bank forecasts an increase in imports in 2018 by 6-8% and growth in exports by 9-10%. The growth of remittances in 2018, the Central Bank expects in the range of 7-9%. The state budget of the Republic of Armenia for 2018 laid the GDP growth by 4.5%. According to the World Bank's forecast for 2018, Armenia's GDP growth will be 3.8% with an acceleration up to 4% in 2019.