GLOBAL CRISIS BITES INTO ARMENIA DUE TO WORLD MARKET INFLUENCE ON ARMENIAN ECONOMY: RESEARCH

ARKA
May 7, 2009

YEREVAN, May 7. /ARKA/. The global economic crisis has hit Armenia
hard due to a strong interrelation between the Armenian and global
economies, Chairman of Economy and Values Research Centre Manuk
Yergnyan said Wednesday at Novosti International Press Centre in
Yerevan.

Summing up the results of research on the influence of the global
economic crisis on Armenia, he said "low economic diversification,
mining industry-oriented exports, as well as the country’s dependence
on foreign remittances accelerated penetration of the global crisis
into the domestic economy."

The ongoing economic slowdown has hit the construction sector hard,
according to Yergnyan.

He pointed out the positive impact of the Armenian national currency
devaluation on some of the local businesses. "We may expect more
tangible results by the end of the second quarter," the economist
added.

With a very small share in the country’s economy, the local banks
were able to escape serious economic shocks, the expert said.

On March 3, the Central Bank of Armenia (CBA) officially returned
to the flexible exchange rate policy. According to CBA experts, the
Armenian dram vs. U.S. dollar exchange rate is expected to range from
360 drams to 380 drams per $1.

Conducting research entitled the Situational Assessment of the Global
Cr isis Impact on Armenia’s Economy, the center Economy and Values
aimed at giving the real picture of the country’s economic situation.

In the past two months, the research centre polled 1,000 local
households and 60 small-to-medium-sized enterprises.