Friday, June 24 2022 18:19

Business community of Armenia calls on economic authorities to take  urgent measures to rescue businesses that suffered greatly from sharp  revaluation of dram

Business community of Armenia calls on economic authorities to take  urgent measures to rescue businesses that suffered greatly from sharp  revaluation of dram

ArmInfo. The business community of Armenia, represented by large business associations, called on the economic authorities to take urgent measures to save the businesses that have suffered greatly from the sharp revaluation of the national currency.

  In its open letter to the leadership of the Central Bank, the  Ministry of Economy and the Ministry of Finance, the Mantashyants  Entrepreneurs Union (180 large-medium entrepreneurs), the Union of  Advanced Technology Enterprises (about 100 IT companies), the  Association of the Armenian Developers (unites more than 30 members  of construction companies) and the "Export Armenia" Association of  Experts  (which unites about 8,000 members) called for urgent  measures to stop further revaluation of the dram, restore it to the  levels at the beginning of the year, or, if this is not possible,  introduce urgent programs to subsidize exporters in the country.

The letter says that the revaluation of the dram, both in the short  and long term, has a tremendous negative impact on the Armenian  economy and has a particularly negative impact on companies  associated with exports, seriously complicating sales, and sometimes  making the produced goods uncompetitive in foreign markets. .

It is noted that technological companies that have to raise prices  for their services by about 20%, which inevitably weakens their  positions in foreign markets and leads to the loss of customers, also  suffer from the revaluation of the dram.  Armenian companies  exporting wine, brandy, juices and other agricultural products are  affected, which, in addition to Russian markets, are also sold their  products in the US, Europe and Asia markets with their  diversification. As noted in the open letter, many companies sell  their products at low cost or even below cost in order not to lose  customers, which, for obvious reasons, cannot last long. Some  companies have suspended exports altogether, hoping that the AMD  exchange rate will return to the level at the beginning of the year.

Many companies exporting agricultural products now have two options.  They either have to raise prices for their products, which leads to a  loss of competitiveness in the long run, or try to purchase more  affordable agricultural products from medium and small farms, which  is not realistic in principle.

The revaluation of the dram at such a pace negatively affects tourism  and construction companies, as well as increases logistics costs,  affecting the prices of international cargo transportation from  Armenia.

The cost in the construction sector is calculated based on the  exchange rate of the dollar to the dram, which is why many companies  have already stopped selling real estate, as the devaluation of the  dollar has changed the cost of construction, especially in the  context of high prices for building materials.

The investment sector of Armenia does not avoid the negative impact  either, since in order to achieve an investment result, investors  have to revise the capex towards a 20% increase. And in the long run,  it can lead to large economic losses.

The authors of the letter expressed confidence that even at the  beginning of the year, none of the economic entities of Armenia could  foresee such high costs associated with a sharp appreciation of the  dram in their annual budget, so many companies do not have reserves  capable of compensating for losses.

POST A COMMENT
Input digits     


News
New government-assisted employment programme launched in ArmeniaNew government-assisted employment programme launched in Armenia
Armenia`s public debt is approaching $10 billionArmenia`s public debt is approaching $10 billion
Finrating ArmInfo: Armenia`s insurance sector summed up H1 2022 with  a profit of $5.6 millionFinrating ArmInfo: Armenia`s insurance sector summed up H1 2022 with  a profit of $5.6 million
"Rossgostrakh Armenia" IC continues to lead in net insurance premiums  and claims
Negotiations on possibility of buying part of Russia`s share in  equity capital of EDB are underway with all founding countries of  BankNegotiations on possibility of buying part of Russia`s share in  equity capital of EDB are underway with all founding countries of  Bank
Number of plastic cards up as capital relocated to Armenia Number of plastic cards up as capital relocated to Armenia 
AMD 4,248,945 to AMD 4,248,945 to "QaylTech": The August beneficiary of "The Power of One Dram" is "The Rehabilitation City of Heroes" - psychological rehabilitation center
Airlines, hotels, banks, rental and leasing sectors registered  significant increase in service volumes in ArmeniaAirlines, hotels, banks, rental and leasing sectors registered  significant increase in service volumes in Armenia
Cargo traffic down, passenger traffic up in Armenia in first half,  2022Cargo traffic down, passenger traffic up in Armenia in first half,  2022
Growth of trade sector was facilitated by increase in activity in  wholesale and car trade marketsGrowth of trade sector was facilitated by increase in activity in  wholesale and car trade markets
4.5% increase in proceeds of Armenia`s communication sector in first  half 20224.5% increase in proceeds of Armenia`s communication sector in first  half 2022
188,856 tourists visit Armenia this July188,856 tourists visit Armenia this July
Accelerated growth of Armenian industrial sector was driven by  processing industryAccelerated growth of Armenian industrial sector was driven by  processing industry
Veolia Djur proposes to raise water tariff in ArmeniaVeolia Djur proposes to raise water tariff in Armenia
State Revenue Committee of Armenia starts active administration in  pursuance of law State Revenue Committee of Armenia starts active administration in  pursuance of law " On Non-Cash Transactions"
Armenia`s premier calls for revising economic programmes Armenia`s premier calls for revising economic programmes 
EDB to allocate $25 million to implement Armenia`s largest livestock  programEDB to allocate $25 million to implement Armenia`s largest livestock  program
Double-digit growth in economic activity in Armenia is accompanied by  surge in imports and exportsDouble-digit growth in economic activity in Armenia is accompanied by  surge in imports and exports
Armenian business forum to be held in Yerevan for second timeArmenian business forum to be held in Yerevan for second time
Production of aluminum foil in Armeniaincreased by 8% in June 2022Production of aluminum foil in Armeniaincreased by 8% in June 2022
Metallurgy industry of Armenia sums up H1 2022 with a 7% declineMetallurgy industry of Armenia sums up H1 2022 with a 7% decline
EDB: Armenia ranks first among member countries with small economies  in current investment portfolio of EDB EDB: Armenia ranks first among member countries with small economies  in current investment portfolio of EDB 
EADB to allocate $37mln for construction of 11 solar power stationsEADB to allocate $37mln for construction of 11 solar power stations
Apartments in Yerevan rose in price by 5.4% in Q2, with increase in  transactions for their purchase and sale by 30.8%Apartments in Yerevan rose in price by 5.4% in Q2, with increase in  transactions for their purchase and sale by 30.8%
 Further rise in food prices in Armenia  Further rise in food prices in Armenia 
Loan payoff with another bank via AppLoan payoff with another bank via App
Deputy Minister: 12 more lanes added to 13 existing lanes of Upper  Lars checkpointDeputy Minister: 12 more lanes added to 13 existing lanes of Upper  Lars checkpoint
Ferry communication to be launched this month - minister Ferry communication to be launched this month - minister 
Armenia is among the TOP-5 destinations for Russian tourists this  autumArmenia is among the TOP-5 destinations for Russian tourists this  autum
Austria to invest in Armenia`s SyunikAustria to invest in Armenia`s Syunik
Gyumri Breeding Station reports three-fold growth in barley output Gyumri Breeding Station reports three-fold growth in barley output 
CBA: In February-June 2022, demand deposits of non-residents  increased significantly in Armenian banksCBA: In February-June 2022, demand deposits of non-residents  increased significantly in Armenian banks
CBA: High demand leads to the expansion of the inflationary  environment and maintenance of high inflation expectations, but dram  appreciation partially neutralizes the price increaseCBA: High demand leads to the expansion of the inflationary  environment and maintenance of high inflation expectations, but dram  appreciation partially neutralizes the price increase
Minister: The share of the mining industry in the total volume of  Armenia`s exports has decreasedMinister: The share of the mining industry in the total volume of  Armenia`s exports has decreased
Statistical data, real situation in agricultural sector different -  minister Statistical data, real situation in agricultural sector different -  minister 
FLYONE ARMENIA launches flights to Domodedovo International AirportFLYONE ARMENIA launches flights to Domodedovo International Airport
Armenia, Iran deepen cooperation in mining industryArmenia, Iran deepen cooperation in mining industry
CBA raises refinancing rate from 9.25% to 9.5% CBA raises refinancing rate from 9.25% to 9.5% 
23.9% rise in petrol prices in Armenia in first half of 2022 23.9% rise in petrol prices in Armenia in first half of 2022 
Armenia meets Russia`s brand demandArmenia meets Russia`s brand demand
Armenia is not ready to open the land border with Turkey: ExpertArmenia is not ready to open the land border with Turkey: Expert
Armenia, Qatar discuss possible areas of bilateral cooperationArmenia, Qatar discuss possible areas of bilateral cooperation
Massive arrival of Russians to Armenia, along with movement of their  capital, ensured 7-multifold increase in net inflow of remittances  from Russia in Q2 2022Massive arrival of Russians to Armenia, along with movement of their  capital, ensured 7-multifold increase in net inflow of remittances  from Russia in Q2 2022
Ardshinbank offers a new type of loan for small and medium enterprises.Ardshinbank offers a new type of loan for small and medium enterprises.
Armenia among priority partners of Austrian Development AgencyArmenia among priority partners of Austrian Development Agency
International reserves of Armenia reaches historical maximum by July  2022International reserves of Armenia reaches historical maximum by July  2022
More funds for government-sponsored medical services More funds for government-sponsored medical services 
South Caucasus Railway delivers production equipment from Yerevan to  KrasnodarSouth Caucasus Railway delivers production equipment from Yerevan to  Krasnodar
4% inflation expected in Armenia in medium-term 4% inflation expected in Armenia in medium-term 
Ameriabank leads in list of largest taxpaying banks in ArmeniaAmeriabank leads in list of largest taxpaying banks in Armenia
Armenia`s communication companies pay 25% less as taxes to budget in  1st half of 2022Armenia`s communication companies pay 25% less as taxes to budget in  1st half of 2022
Over 500 Armenian servicemen to benefit from soft lending programmeOver 500 Armenian servicemen to benefit from soft lending programme
Washington to allocate $120mln to Armenia for democratic development,  economic stabilityWashington to allocate $120mln to Armenia for democratic development,  economic stability
17.1% increase in food prices significantly affected low-income  citizens of Armenia - study17.1% increase in food prices significantly affected low-income  citizens of Armenia - study
Armenia, Ethiopia consider development of cooperation in e-governance  and technology educationArmenia, Ethiopia consider development of cooperation in e-governance  and technology education
Armenian assets of GeoProMining Group of Compaines significantly  increase payments to state budgetArmenian assets of GeoProMining Group of Compaines significantly  increase payments to state budget
Vardan Aramyan pointed to risks for Armenia`s GDP and loss of  potential of Russian economy amid IMF`s Vardan Aramyan pointed to risks for Armenia`s GDP and loss of  potential of Russian economy amid IMF`s "Gloomy and More Uncertain"  forecast
Armenia`s vice-premier hosts AMD company vice-presidents Armenia`s vice-premier hosts AMD company vice-presidents 
MFA: Sanctions against Russia have their negative direct or indirect  impact on Armenia`s economic development MFA: Sanctions against Russia have their negative direct or indirect  impact on Armenia`s economic development 
Mirzoyan, Lipavsky note need to fully realize potential of trade and  economic bilateral relationsMirzoyan, Lipavsky note need to fully realize potential of trade and  economic bilateral relations
Read more


Exchange rates
19.08.2022
RUB6.870.04
USD405.15-0.64
EUR407.50-5.31
GBP479.66-9.52
CAD311.97-2.79
JPY29.61-0.40
CNY59.52-0.33
CHF423.53-2.23