ARMENIA WILL OVERCOME CRISIS WITHIN SHORTEST TERMS

PanARMENIAN.Net
06.05.2009 16:56 GMT+04:00

/PanARMENIAN.Net/ Fast spread of world crisis influence on Armenia
testifies to Armenia’s vulnerability to outer shocks, Economics and
Values Research Center Chairman, Manuk Hergnyan told a news conference
in Yerevan. "GDP slump in Armenia began simultaneously with Europe
and USA GDP slump in the last quarter of 2008," he said. According
to him, even Russia did not register such a rapid slump, despite the
downfall it had to face in the first quarter of 2009.

Hergnyan noted that the opinion that Armenia has developed immunity
against the world crisis on the strength of its weak integration
in world economy is wrong. "Fast spread of world crisis in Armenia
testifies to the fact that Armenia is actively interacting with world
economies, though with the help of special mechanisms," he said.

According to Manuk Hergnyan, low rate of economy diversification in
Armenia also influenced the spread of crisis, specifically export’s
concentration on mining industry and strong dependence on private
transfers.

Besides, as opposed to other countries, where the crisis began with
financial markets shocks, in Armenia it began with real sector of
economy, which was conditioned by drastic slump in world prices for
copper and molybdenum in August-December of 2008.

Research Center Chairman believes that reduction of transfers
and drastic slump in the sphere of construction caused further
intensification of crisis.

"We mustn’t overlook the fact that March devaluation has had a positive
effect on local production volumes, which will be proved in the second
half of 2009," he added. Besides, weak participation of RA banking
sector in economy saved RA financial system from crisis shocks in
the first stage of its development.

"Financial can’t last for eternity. Armenia will be able to overcome
this one in shortest terms.

Previous crisis considered, Armenia will need around 4 years to
return its GDP to pre-crisis level. Based on Armenian economy’s quick
reaction capability, we could infer that RA economy stabilization
will take place simultaneously with stabilization of major economies,"
the Chairman concluded.

From: Emil Lazarian | Ararat NewsPress