ARMENIA’S ECONOMY MAY COLLAPSE
04.02.2016
11:00
It’s already long time that no real and qualitative economic growth was recorded in Armenia. 3,1% indicator of economic activity for 2015 published by the National Statistical Service (NSS) does not seem reliable. However, even if the economic activity indicator were 7%, no significant positive development would be recorded within the general population, taking into account the social polarization, high level of monopolization in the economy and unequal distribution of revenues.

This was stated by the economists in Media Center, adding also that the model of economy based on money transfers and mining has long exhausted itself. 

Last year the main factors of economic activity were three sectors  - agriculture (11,7%), industry  (5,2%) and services (2,7%). Annual indicator of economic activity is 3,1%; the GDP growth indicator will not be much different compared to that. It should be noted that according to January-November data the volume of transfers from Russia for the same period, from where about 87% of transfers come to Armenia, reduced by 43,4%. In spite of 37% reduction of transfers and  27% reduction of import, according to official data, the internal trade in the same period decreased only for 6,4%.

The Chairman of the RA Central Bank in the years of 1994-1998, Bagrat Asatryan believes that macro-economic indicators published by the RA National Statistical Service are not reliable. “The figures show that no significant growth in the sectors of agriculture and industry was recorded,” he said.

Asatryan believes it is obvious that for small economies like Armenia, where monopolies prevail and polarization of revenue distribution is big, 3,1% of economic activity is not the an indicator to “characterize as development”.

Mikayel Melkumyan explains that the growth in the sectors of agriculture and production was recorded at the expense of the growth of physical volume of production, and is not expressed in monetary value. “This means that more agricultural or industrial products, like copper concentrate, were produced, but they didn't have proper value, the price was low,” said Melkumyan, adding that last year the import volume reduced by 27%, and the export volume – by 4%.

Agreeing with the voiced opinions, the economist Atom Margaryan noted that after the economic crisis in 2008, the economic model of Armenia which is based on high prices of mining resources and transfers, does not work anymore. “It has been exhausted; clear and specific   efforts are needed to build innovative, highly paid modernized economy. But currently the Government tries to find situational solutions and borrow resources. It is possible to play for time like that, but not for long time. External debt already makes up about 50% of GDP, and the consolidated public and private debt is 85% of GDP, which his already dangerous”, he said, adding that if this continues in the future, the RA economy may collapse.

Arshaluys Mghdesyan

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