Armenia’s economy to face double blow- newspaper

YEREVAN, August 21. /ARKA/. Armenia’s economy may face a double blow soon, according to the article published in Golos Armenii (Voice of Armenia) newspaper Tuesday.

According to the source, Finance Minister Vache Gabrielyan said at the recent cabinet meeting, “I more than believe that the State will continue gaining economic growth and replenishing the budget.”

“Meanwhile, it is obvious that Armenia may be hooked by two sides simultaneously, either by the CIS ( particularly, Russia), or the European Union, which is our principal foreign commercial partner. And our economy won’t be able to resist this double blow the same way our Olympic team didn’t resist the opponents in London. Armenia still has issues with monopoly and weakly diversified economy, particularly, export, as well as the corruption,” the article says.

The number of private transfers is also increasing month by month, the newspaper reports. The non-commercial remittances of individuals rose by 8.7% within the fist five months from a year earlier, according to the CB.

“But The economist journal experts have recently focused on one significant nuance: since January 2011 remittances to Armenia are steadily falling,” the newspaper highlights. 

Private investments to Armenia have also dropped within the first five months more than expected, according to CB. Moreover, since February 2012 global prices for iron ore, aluminum and nickel have slashed by average 20%. Copper prices slipped by 5.2% in June, and by 18.1% in a year.

The newspaper also informs that Armenia’s CB is not succeeding to control the inflation as of now. Inflation reported 2.2% within Jan-

July compared to the same period a year earlier. Armenia reported 1.5% deflation in July. Such dynamics is triggered by the seasonal factors, which will be over soon.

“However, wheat harvest is reducing due to the drought and its results, prompting unavoidable increase in flour and bread prices. If the natural gas prices grow, it is unclear whether the government and Central Bank will manage to maintain the projected inflation rate ( 4% plus minus 1.5%),” according to the source.

Hereby, if the tendencies, mentioned above, continue developing, Armenia will face a fiscal collapse, the author of the article warns. —0-