Economist: subsidizing loans for businesses by government will not save Armenian economy

YEREVAN, February 1. /ARKA/. Subsidizing loans for businesses by the government is not a key way out of the difficult economic situation, economist Tatul Manaseryan, said today in a comment on the decision of the Central Bank of Armenia to raise the refinancing rate by 0.25 p.p. to 8%.

"Subsidizing is the most primitive method. The government can directly implement many projects, not through banks. I am not against the fact that banks make money. However, in crisis situations, when the attractiveness of loans decreases and the cost of money rises, the government itself can do a lot through its agencies, structures and local bodies. Primitive subsidizing methods will not save the economy," Manaseryan argued.  

He also mentioned that it is necessary to focus on priority directions, locomotives of economy and to concentrate attention and resources on the development of such areas which can drag others.

"Many countries apply non-standard measures, and there are risks in all such initiatives. I am not sure that the government can help businesses only by subsidizing, that is, by dispersing limited budgetary funds, because in this case, there is a great risk that the tasks facing the economy will not be realized," said the economist.

Manaseryan expressed doubt that the government will be ready to listen to experts' opinions on alternative ways to solve the problem. -0-