Premier: Armenia should pay special attention to reforms in economy’s real sector
10.04.2012,
19:57
The main lesson Armenia has learned from the crisis is acknowledgement of the necessity to pay greater attention to industrial policy, to diversify the structure of the gross domestic product and to speed up the implementation of reforms in the real sector, Armenian Prime Minister Tigran Sargsyan said in an interview with RBC.
YEREVAN, April 10. /ARKA/. The main lesson Armenia has learned from the crisis is acknowledgement of the necessity to pay greater attention to industrial policy, to diversify the structure of the gross domestic product and to speed up the implementation of reforms in the real sector, Armenian Prime Minister Tigran Sargsyan said in an interview with RBC.
He said that Armenia’s banking sector was better prepared to the crisis than other CIS countries’ banking sectors.
The thing is that banking sector reformation in Armenia was completed earlier than in other countries, and there were no bad loans in our banking sector.
“Supervision was very strong and banks’ public reports corresponded to the reality – there were no bad assets, liquidity was properly supported,” the premier said.
He said that Armenia had been stricken by double-dip crisis, which affected the real sector. First of all, this deterioration was caused by things in Russia, since “economic situation in your country has a strong influence on Armenia’s economy”.
He pointed out the great number of Russian companies in Armenia’s real rector as one of the factors of this dependence and large investments from Russia as another factor.
“That is why the flow of Russian investments to Armenia dwindles when things there worsen,” he said in his interview. “The third factor is individual transfers. Many Armenian citizens work in Russia and $1 billion of individual transfers every year is very important for Armenia.”
Sargsyan said that these three factors had adverse impacts on Armenia’s economy, first of all, on the country’s construction sector.
Pointing out that pre-crisis growth had mainly been propelled by construction that grew no less than 20% every year, Sargsyan said he viewed this sector’s current 20-percent share of in GDP as inexcusable luxury.
“Dependence on this single sector weakens our position and narrows diversification,” he said. “This is what exactly happened in 2009 – 42-percent decline in construction led to deterioration in macroeconomic indicators.”
The premier said that the country recorded 2% GDP growth already in 2010 and 4.6% in 2011.
“We are witnessing a gradual recovery,” he said.-0---
