Monday, February 20 2023 17:36

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.