Thursday, July 21 2022 16:09

ArmInfo.Since the end of February, about 140 thousand citizens of Russia, Ukraine and other countries, both individuals and legal entities, have moved to  Armenia, but their impact on the country's economy may be short-term  in the absence of a clear strategy for the development of the  national economy. Tatul Manaseryan, expert, doctor of economic  sciences, professor, head of the "Alternative" research center,  stated this at a press conference.

According to him, this is a serious dynamic for the small consumer  market of Armenia. However, with the departure of the latter from the  country, as the expert noted, the economy may receive a serious blow  if the state does not have a clear strategy the development of the national economyand predictable developments.   "Episodic effects in the economy today may be positive, but tomorrow we will be left with our problems with nothing," he said.

The expert believes that, first of all, it is the increase in the  number of consumers that conditions the recorded indicators of  economic growth (10.2% for January-May - ed. note). In addition, he  pointed to the revival of tourism, which is mainly due to the arrival  of many thousands of representatives of the Diaspora in Armenia,  which Manaseryan called a fairly common phenomenon. Turning to the  industrial sector,, the expert noted that, of course, it has provided  a certain revitalization but he noted that this is not a sector in  which we should be proud of our successes, , - said the economist.  According to him,  only importers are in a profitable position in Armenia today, who  receive excess profits due to the revaluation of the dram, which is  accompanied by an increase in prices in the domestic market.

"I would very much like to hear an explanation from the government  about what was their contribution to the recorded economic growth,  which turned out to be the result of the policies they led," he said.

In this context, Manaseryan stressed that it is not worth referring  only to the international market in the issue of price increase and  talking about import inflation.

At the same time, the economist positively assessed the role of the  Central Bank in terms of conducting monetary policy. Tools for price  stabilization are used, but according to Manaseryan, there are no  steps against the general trend. In this sense, he pointed out the  need for a coordinated policy and common approaches of the Ministry  of Economy, the Ministry of Finance, the State Revenue Committee, the  Committee for the Protection of Competition, etc.

According to the Statistical Committee the growth of economic  activity in Armenia, accelerated in January-May 2022 to 10.2% per  annum (from 4.3% a year earlier), which is accompanied by high growth  rates  of exports and imports. In May of this year, by May 2021,  economic  activity accelerated growth to 13% (from 10.9% a year  earlier), while increasing by 6.1% in May 2022 (against 2% growth in  May 2021 and  5.3% growth in April 2022).  According to the  preliminary data of the RA Statistical Committee,  the growth of  economic activity in January-May 2022 was largely  conditioned by:  the service sector - by 24.9%, the energy complex -  by 13.1% and the  construction sector - by 11.4%, and to a lesser  extent the trade  (8.9%) and the industrial sectors (2.7%). 

In the foreign exchange retail market of   Armenia from October 2021  to June 22, 2022, the dram revalued against   the dollar by 14% (from  485 AMD/$1 on average), against the euro - by   22% (from 563  AMD/1EUR on average), while devaluing against the ruble by 6% (from    6.7 AMD/1RUB on average).  It is appropriate to note that   the  unprecedented western sanctions imposed on Russia account for the   highly volatile market since this March. In particular, this year,    from February 24 to June 22, in the retail currency market of    Armenia, the dram devalued against the Russian ruble by 19% - to 7.1    AMD/1RUB on average. At the same time, during this period, the dram  revalued both against the US dollar - by 13% to 417 AMDs / $ 1, and    against the euro - by 19% to 439.5 AMD / 1 EUR.    

Head of the Central Bank of Armenia Martin Galstyan, in  response to   calls for the need to artificially  enter the market,  devaluing the   existing exchange rate by the  Regulator, which may  help a certain   segment of the business -  exporters - he drew  attention to the fact   that as a result, the  general public will pay  for such actions. "If   we go against our mandate, artificially devalue  the dram, then we   will face a new wave  of inflation which will  affect everyone," the   head of the Central  Bank said.  In the current conditions, he noted   the importance of the state's   sectoral policy, on the basis of   which the most affected sectors that   have lost their   competitiveness will receive assistance from the   state in the form   of additional subsidies, tax cuts, etc.  Earlier, Armenian  entrepreneurs issued a statement in which they  indicated   that the   exporters of agricultural products, beverages, as  well as  the   tourism sector, the IT sector and developers, suffered  the most    from the strengthening of the national currency.  

Giving an assessment of the policy of the Central Bank in the current    realities, the official noted: "We live in a non-trivial time, and as    of today it is necessary to use all the tools so that the economy    reaches high growth rates." At the same time, he pointed to the large    amount of work that the Ministry of Economy is doing to share control    over inflation with the Central Bank, in particular, through    subsidizing the import of various goods and activities. In this   regard, he recalled his experience as the head of a supermarket chain   in the early 2000s, when a sharp revaluation of the  dram was  registered on the market. "I witnessed how our producers and    exporters suffered during this period, how locally produced products    on store shelves were replaced by goods from Russia, Ukraine, Turkey,    etc.," he said. Consequently, Kerobyan stated that as long as he   holds the post of  Minister of Economy, he cannot allow the   repetition of past scenarios, referring in this context to the   industrial development  policy adopted by the government.