Friday, June 11 2021 15:51
David Stepanyan

Forecast: The economic consequences of the war for Armenia are still  ahead

Forecast: The economic consequences of the war for Armenia are still  ahead

ArmInfo.The Armenian economy has not yet been faced with the consequences of the defeat in the 44-day war. The trends that we observe in the economy today are results of  the consequences of the coronavirus pandemic in the world. Former  Head of the Central Bank of Armenia, candidate for MP of the  proportional list of the Armenian National Congress Party Bagrat  Asatryan expressed this opinion at a press conference.

"To our great regret, we still have to face the consequences of last  year's war. Almost 8 months have passed since the end of the war, but  the authorities have not yet taken the programmatic steps and  measures necessary to overcome the economic consequences of this  tragedy. There was a significant economic downturn in Armenia last  year, and against the background of the available economic  indicators, the current state of the economy as a whole can be  characterized as a crisis," the economist noted.

In this light, Asatryan stressed that the state of the economy is  overloaded with external debt. According to him, the external debt  is repeatedly and consistently increasing. In this light, he noted  that Armenia has summed up the fiscal year with an almost 64% ratio between external debt and GDP. Meanwhile, the latter is already a violation of the law, which does not allow exceeding the threshold  of 60%. Moreover, following this, the relevant fiscal and other state bodies have not published a single conclusion, not to mention the  publication of their further intentions.

Acting Minister of Finance Atom Janjughazyan, during the discussions  on the implementation of the state budget for 2020 in parliament,  stated that the state debt of Armenia is $ 7. 968 million, 7.509  million of which falls on the government, the rest - the Central Bank  of the Republic of Armenia. According to him, the share of external  debt in the government's debt amounted to $ 5.593 million, internal  debt - 1.915 million. Asatryan considers the allocation of  significant funds from the state budget to service the state debt as  an important derivative of the state debt problem. According to him,  one tenth of the budget funds are annually allocated for this, which  is a rather large burden for the state budget of a country of the  caliber of Armenia. "We understand very well that countries like ours  cannot exist without debts. The whole question is in the degree of  controllability of these debts. Which at this stage is in the risk  zone," the economist believes.

"We understand that the current state of Armenia, conditioned again  by the war, requires investments. We are talking about infrastructure  at the borders, infrastructure in the regions, etc. It is also clear  that the state budget will not cope with such expenses. I have always  said that the state debt of Armenia, in general, it is not large. The  problem is in the small volumes of our GDP, which must be increased  by all possible means, what I did not see yesterday and I don't see  today, "he stressed.  Earlier, Head of the Central Bank of Armenia  Martin Galstyan said in parliament that, despite the high state debt,  the Armenian government needs to continue to take measures to support  the economy. "The Central Bank recognizes the legitimacy of state  policy in the current exceptional conditions. Accordingly, support  must be continued," Galstyan said.  

To note, in 2020 the volume of anti-crisis support for the economy  amounted to about $ 410 million, or approximately 3.5% of GDP. The  revenues of the state budget of Armenia in 2020 amounted to 1  trillion 561 billion drams, expenditures - 1 trillion 895 billion.  

According to Galstyan, as a result of a 5.4% reduction in tax  revenues in 2020, the state stimulation of the economy in financial  terms was 2.5-fold higher than planned. As a result, the ratio of  public debt to GDP at the end of 2020 increased from 49.9% to 63.5%.  In this light, the government, according to the head of the Central  Bank, needs to develop an action program in order to lower the debt  level below 60% in the next 5 years. 


News
Growth of economic activity accelerates in ArmeniaGrowth of economic activity accelerates in Armenia
Armenia intends to expand cooperation with leadership of Iran`s  Social Security Investment CompanyArmenia intends to expand cooperation with leadership of Iran`s  Social Security Investment Company
Clarification of State Revenue Committee about new advantages of  obtaining  certificate of  law-abiding taxpayerClarification of State Revenue Committee about new advantages of  obtaining  certificate of  law-abiding taxpayer
1000 large taxpayers of Armenia paid about $ 1.2 billion to the state  budget in H1, 2021: Defense Ministry apparatus is the third on the  list 1000 large taxpayers of Armenia paid about $ 1.2 billion to the state  budget in H1, 2021: Defense Ministry apparatus is the third on the  list 
US State Department Investment Review: The financial sector in  Armenia is not highly developedUS State Department Investment Review: The financial sector in  Armenia is not highly developed
Government of Armenia discussed agricultural programs implemented  with support of stateGovernment of Armenia discussed agricultural programs implemented  with support of state
Updated RA Law Updated RA Law "On Combating Money Laundering and Financing of  Terrorism" will enter into force on July 26
Armenian Regulator excludes cartel agreement in liquefied gas marketArmenian Regulator excludes cartel agreement in liquefied gas market
Tax revenues of the Armenian state treasury as of July 20 amounted to  865.2 billion AMD with an annual indicator of 1 trillion 510 billion  AMDTax revenues of the Armenian state treasury as of July 20 amounted to  865.2 billion AMD with an annual indicator of 1 trillion 510 billion  AMD
Armenian Ambassador to the Czech Republic held talks with the  leadership of Armenian Ambassador to the Czech Republic held talks with the  leadership of "CzechInvest"
Agricultural land sales remain high in the regions of ArmeniaAgricultural land sales remain high in the regions of Armenia
Deputy Minister of Economy and Russia`s Ambassador discussed  development of the Armenian-Russian strategic, trade and investment  cooperation Deputy Minister of Economy and Russia`s Ambassador discussed  development of the Armenian-Russian strategic, trade and investment  cooperation 
Resident of FEZ Resident of FEZ "Alliance" LLC "Arides" intends to expand activities  in the field of electronics and precision engineering
The trend of monthly growth in apartment prices in Yerevan continuesThe trend of monthly growth in apartment prices in Yerevan continues
It was a joke: Armenian Minister of Economy on his call to It was a joke: Armenian Minister of Economy on his call to "detain"  labor migrants
Armenian government allocated about $ 17.8 million for overhaul of  roads with length of 50.7 kmArmenian government allocated about $ 17.8 million for overhaul of  roads with length of 50.7 km
Armenian authorities will fight against tax Armenian authorities will fight against tax "parasites"
Issues of implementation of a number of investment programs discussed  in the Armenian governmentIssues of implementation of a number of investment programs discussed  in the Armenian government
Best specialists of nuclear industry started annealing reactor vessel  metal of Armenian NPPBest specialists of nuclear industry started annealing reactor vessel  metal of Armenian NPP
Armenia will explore space with Russian partnersArmenia will explore space with Russian partners
Vahan Kerobyan: Armenia`s labor market has set a new recordVahan Kerobyan: Armenia`s labor market has set a new record
Papikyan announces investments in Gyumri in amount of about $ 8.5  millionPapikyan announces investments in Gyumri in amount of about $ 8.5  million
As part of 2025 strategy, EAEU will develop a concept for  implementation of principles of green economyAs part of 2025 strategy, EAEU will develop a concept for  implementation of principles of green economy
EEC supported  draft roadmap for formation of common market for  organic agricultural productsEEC supported  draft roadmap for formation of common market for  organic agricultural products
For 5 months of 2021, the mutual trade of the EAEU member states  increased by 33%For 5 months of 2021, the mutual trade of the EAEU member states  increased by 33%
SRC of Armenia reports on the next record in the number of jobsSRC of Armenia reports on the next record in the number of jobs
Electronic system of Electronic system of "single window" in the field of foreign trade  will be launched by the end of 2021
Deputy Minister of Economy of Armenia sent on an official trip to  Russia to discuss issues of bilateral trade and economic cooperationDeputy Minister of Economy of Armenia sent on an official trip to  Russia to discuss issues of bilateral trade and economic cooperation
Revazyan: After the formation of a national air carrier, Armenia will  appeal to Europe with a request, as an exception, to allow access to  the Revazyan: After the formation of a national air carrier, Armenia will  appeal to Europe with a request, as an exception, to allow access to  the "European sky"
Life on loan: In six months, Armenia`s public debt grew by $ 901  million - up to $ 8 billion 869 millionLife on loan: In six months, Armenia`s public debt grew by $ 901  million - up to $ 8 billion 869 million
Armenia considers possibility of canceling excise tax for winemakersArmenia considers possibility of canceling excise tax for winemakers
Armenian customs officers with Iranian colleagues discussed  modernization of Meghri checkpointArmenian customs officers with Iranian colleagues discussed  modernization of Meghri checkpoint
Government together with KfW, EIB and EU will allocate 81 million  euros to ensure water supply in several regions of ArmeniaGovernment together with KfW, EIB and EU will allocate 81 million  euros to ensure water supply in several regions of Armenia
Nikol Pashinyan visited Nikol Pashinyan visited "Saranist" glass production company and got  acquainted with activities of new brandy factory
The next vector of ANIF activities is to provide support to water and  waste management systemsThe next vector of ANIF activities is to provide support to water and  waste management systems
With formation of national air carrier and increase in passenger  traffic, issue of expanding Zvartnots airport may ariseWith formation of national air carrier and increase in passenger  traffic, issue of expanding Zvartnots airport may arise
Ameriabank receives Euromoney Euromoney Award for Excellence 2021 as  the Best Bank in ArmeniaAmeriabank receives Euromoney Euromoney Award for Excellence 2021 as  the Best Bank in Armenia
The largest aviation concern in Europe - Lufthansa enters the  Armenian marketThe largest aviation concern in Europe - Lufthansa enters the  Armenian market
National air carrier to be established in Armenia within the  framework of the agreement with Air ArabiaNational air carrier to be established in Armenia within the  framework of the agreement with Air Arabia
Vahan Kerobyan once again found it realistic to end 2021 with  economic growth of 10-11%Vahan Kerobyan once again found it realistic to end 2021 with  economic growth of 10-11%
EU to allocate 600 million euros for the construction of the southern  section of the North-South highwayEU to allocate 600 million euros for the construction of the southern  section of the North-South highway
IDBank`s Visa Digital card: another key to online and contactless paymentsIDBank`s Visa Digital card: another key to online and contactless payments
In H1 2021, Armenia`s international reserves increased by 18.7%  amounting to $ 3.1 billionIn H1 2021, Armenia`s international reserves increased by 18.7%  amounting to $ 3.1 billion
Armenian government convened an extraordinary meeting to discuss a  four-year program to reduce public debtArmenian government convened an extraordinary meeting to discuss a  four-year program to reduce public debt
Export of ferromolybdenum, copper and molybdenum concentrate to third  countries will be subject to a 15% state dutyExport of ferromolybdenum, copper and molybdenum concentrate to third  countries will be subject to a 15% state duty
RA  Ambassador informed about interest of Armenian businessmen  in expanding economic relations with IranRA  Ambassador informed about interest of Armenian businessmen  in expanding economic relations with Iran
CBA: Net inflow of transfers from individuals increased by 89% per  annum in Jan-May 2021 CBA: Net inflow of transfers from individuals increased by 89% per  annum in Jan-May 2021 
High growth of mortgage portfolio supports the loan activity of  banking systemHigh growth of mortgage portfolio supports the loan activity of  banking system
After a long time, passenger transportation in Armenia has grown in  conditions of coronacrisis After a long time, passenger transportation in Armenia has grown in  conditions of coronacrisis 
Revenue in communications sector of Armenia increased by 3.2% per  annum by June 2021Revenue in communications sector of Armenia increased by 3.2% per  annum by June 2021
Possibilities of expanding Armenian-French cooperation in field of  high technologies discussed in YerevanPossibilities of expanding Armenian-French cooperation in field of  high technologies discussed in Yerevan
Trade sector in Armenia is heading towards recovery to pre-COVID  growth ratesTrade sector in Armenia is heading towards recovery to pre-COVID  growth rates
Revenue of service sector in Armenia grew by only 0.9% in 5 monthsRevenue of service sector in Armenia grew by only 0.9% in 5 months
The client base of Armenian banks increased by 7.4% by May 2021The client base of Armenian banks increased by 7.4% by May 2021
Card to card transfer campaign for Converse Bank Visa cardholders in a new formatCard to card transfer campaign for Converse Bank Visa cardholders in a new format
Armenia doubled the export of agricultural productsArmenia doubled the export of agricultural products
Mher Grigoryan: EU is one of Armenia`s key partners in implementing  ambitious reformsMher Grigoryan: EU is one of Armenia`s key partners in implementing  ambitious reforms
Armenia and Greece in search of new directions of cooperation in the  field of technologyArmenia and Greece in search of new directions of cooperation in the  field of technology
IDBank joined the fulfillment of children`s dreamsIDBank joined the fulfillment of children`s dreams
EDB forecasts 4.2% economic growth in Armenia and indicates a very  gradual movement of the economy towards its potential level EDB forecasts 4.2% economic growth in Armenia and indicates a very  gradual movement of the economy towards its potential level 
Read more


Exchange rates
26.07.2021
RUB6.52-0.05
USD482.52-0.90
EUR569.280.39
GBP665.641.52
CAD384.51-0.16
JPY43.75-0.02
CNY74.51-0.26
CHF525.910.85