“Impact of the global crisis on Armenia" forum kicks off
“Impact of the global crisis on Armenia; short-term and long-term perspectives” two-day international forum has kicked off in Yerevan Tuesday. Armenian Prime Minister Tigran Sargsyan, World Bank Regional Director for the South Caucasus Asad Alam, representatives from the World Bank (WB), International Monetary Fund (IMF), UNO, OSCE and a number of institutions are attending the forum.
In his address the Armenian PM Tigran Sargsyan noted the impact of the global economic crisis on our country has its distinctive features, particularly with its first wave having not deeply affected the banking system.
According to the PM, the impact of the crisis was particularly viewed as a result of slash in private investments and transfers, which has affected the financial system.
As Tigran Sargsyan said, the government was facing an alternative in 2008: how to move from the currency valuation phase to that of devaluation? According to the PM, at the first stage the financial stability came to be a priority and, generally, the financial system underwent no quakes, as a result.
As a second major problem, Armenian PM noted to be the slow-down of the construction field. During the first 5 months this year we have observed an economic decline of 16% and this is conditioned by decrease of the construction scales.
“We forecast further decline in the indexes in the upcoming future. Improvement can be expected only by the end of the year,” T. Sargsyan said.
The Government views three scripts for further developments: economic decline of 3,5%, 16% or 20%. Under the current conditions, the budget expenditure is to make about 900 billion AMD.
“The most part of the means for financing we receive from the Asian Bank – about $80 million, the WB - $60 million, 24 billion AMD is foreseen to be used from the loan allocated by Russia, another 24 billion will be provided by the inner market. $150 million allocated by the IMF will ensure the most major investment,” T. Sargsyan said.
PM informed, the country’s external debt will make 35-40% in proportion to the GDP, though, the government sees no problems since the loans have been allocated on long-term basis.
“The crisis revealed a number of problems existing in our economy. It is vulnerable and a serious diversification is needed in terms of its structure,” T. Sargsyan said.
The sides discussed a range of issues concerning Armenian-Iranian energy cooperation. They underlined the importance of joint projects, in particular the project on construction of the 3rd high-voltage transmission line between Armenia and Iran and financial issues related to the project were considered.