YEREVAN, January 11. /ARKA/. The recent economic crisis revealed a few channels through which global developments may affect the Armenian economy, Jean-Michel Happi, the World Bank’s Country Manager for Armenia, said in an interview with ARKA News Agency.
The first is trade, he said. “Reduced demand for base metals, which constitute the major part of the Armenian exports, pushes down metal prices which results in lower export incomes or even contracting in the mining sector if the prices go below the break-even point.”
The second channel he pointed is remittances and FDI. “Worsened economic situation in partner countries (EU and Russia) affects their decision and capacities to invest / send money to Armenia.”
Happi also singled out food and energy price shock among outside factors able to affect Armenia.
“Armenia is heavily dependent on the imported wheat and fuel commodities. Unfavorable weather conditions in Russia and Kazakhstan have already had some spillover effects on Armenia, as prices for bread accelerated during the second half or 2012,” he said in his interview.
Happi said that the global developments and their impact on Armenia largely depend on whether and what kind of risks will materialize. “Our medium-term forecasts do not anticipate major upside or downside risks associated with the current uncertainties in the eurozone area and growth projections remain within the range of 4-5 percent per annum, he said.-0---