TODAY.AZ / Analytics

Armenia falling into economic coma

01 March 2014 [11:20] - TODAY.AZ
By AzerNews

The devaluation of Armenia's national currency, dram, has become a major problem so that its negative consequences will bring the country closer to an economic crisis.

The U.S. dollar exchange rate continues to grow rapidly in Armenia for the last 20 days and the rate is expected to increase subsequently.

On February 27, the U.S. dollar exchange rate hit 412.93 drams. It rose by 0.17 drams compared to the previous day, the Armenian Central Bank reported.

Local economists believe that this occurrence clearly mirrors the situation in the country's economy.

"This is a result of what has happened in Armenia's economy for the last two or three years. All macroeconomic indicators about the economic growth are false," said economist Vaagn Khacatryan. "Armenia has neither a normal export, nor economic growth."

Armenia's economic growth rate was 3.5 percent in 2013. Armenian President Serzh Sargsyan recently expressed his concern over the reduction in the level of foreign investments in the country.

The total amount of foreign direct investments in the Armenian economy totaled $155.1 million in the first nine months of 2013. The figure decreased by 62.1 percent compared to the same period of 2012, official statistics show.

The complicated economic situation in Armenia gave way to despair for the authorities. Now, Armenia has activated its efforts in hope to explore oil and gas. The first stage of ineffectual researches was held in December 2013. The country intends to launch new five year research program on March 2014.

The Armenian authorities seem intend to use all possible ways out from the deteriorated situation. The authorities have put on urgent sale capital Yerevan's rather large restaurant complexes, which are in the city centre.

The further increase of the U.S. dollar exchange rate may soon lead to tragic consequences such as a rise in price of certain categories of goods in Armenia.

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