ArmInfo. Armenia's economy still feels a dire need for capital and available financing, Armenia's Minister of Economy Vahan Kerobyan believes.
"Saying that our economy has sufficient money would be untrue," Mr Kerobyan said. He stressed a very low level of monetization of economy. That is, the M1/GDP ratio in Armenia is much lower than it should be. In the EU, it is around 120%, whereas it is within 30% in Armenia. "That is, our economy has four times less blood in its veins," Mr Kerobyan said.
Referring to various data published over the last 20 years, Mr Kerobyan stressed that almost every Armenian company has problems with access to finance. "This is the first major obstacle to businesses in Armenia. Even corruption and tax burden have traditionally been regarded as a factor hampering economic development less than the lack of access to funds," Mr Kerobyan said.
The Ministry of Economy is actively working to solve the problem. I think it will produce results," the minister said.
ArmInfo economic experts believe that the 12.6% economic growth had a very weak influence on the country's money market. In 2021 and 2022 saw a 2.5% decline in loans Armenia's banking system issued to economy, despite the fact that last year the country's banking system recorded unprecedented profit, AMD 263bln, an increase of over 3-fold mainly due to noninterest incomes and inflow of relocated employees. The banks' loan portfolio increased mainly due to private loans and the interbank market. The cost of money is one more factor restricting the access to funds. In preventing possible double-digit inflation, Armenia's Central Bank raised the refinancing rate to an unprecedented 10.75%. According to the Central Bank, Armenia does not sacrifice economic growth to lower inflation. It may be so in terms of figures, but the quality of this growth leaves to be desired, the minister says.
