HEAD OF ARMENIAN CB: INFLATION TO TOTAL ABOUT 6% IN 2008 IN ARMENIA BY PRELIMINARY DATA

ArmInfo
2008-11-13 16:23:00

ArmInfo. Inflation will total about 6% in 2008 in Armenia by
preliminary data, Chairman of the Armenian Central Bank Artur Javadyan
said in the parliament Thursday.

He said Armenia is still among the states having the lowest
inflation in CIS. Thus, inflation in Azerbaijan will total 27%
by preliminary data. ‘It is grave illness which is the problem for
the Government, Central bank and the public. It is impossible to
speak of development having so high inflation’, A. Javadyan said. He
called rather realistic the 4% (plus-minus 1.5%) inflation the draft
budget of Armenia for 2009 envisages. The fluctuation of the foreign
exchange rate (US dollar) will not exceed 2%. The exchange rate
of the Armenian dram and US dollar in the country made up 300-309
drams per 1 US dollar from Dec 2007 up to October 2008. The share of
foreign debt in GDP inspires with optimism as well, since it is among
the lowest in CIS. In this connection, the Central Bank intends to
further evaluate the situation. He did not rule out the possibility
of new foreign borrowings. The World Bank mission is currently in
Armenia and some scenarios are discussed with it. In particular,
they discuss additional 250 million dollars credit for development
of small and medium-size enterprises if necessary. Taking into
consideration regional problems leading to growing unemployment,
the country may receive these funds and the draft budget for 2009
may be revised. Negotiations are underway with the EBRD, Asian
Development Bank and German KfW Bank for implementation of programs
in other spheres. In particular, negotiations are for provision of
credits for implementation of mortgage lending programs and loans
for development of the industrial sector. A. Javadyan mentioned the
project of All Armenian Bank where the country’s participation will
total about 120 million dollars. The total capital of the bank will
make up 100 million dollars or 30 billion drams. All these funds will
be invested in development of real sector.