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Armenia remains unattractive for foreign investors

24 November 2014 [15:41] - TODAY.AZ

/AzerNews/

By Mushvig Mehdiyev

Investments in Armenian economy are expected to decrease drastically amid the ongoing deterioration of the country's economic crisis.

Potential investors are forgetting about investing in Armenia, as the post-Soviet country's economy lacks a positive feedback mechanism to stabilize the investments and control inflation.

The Armenian Economy Ministry claims that the financiers are unwilling to invest in the country due to objective and subjective reasons.

The Ministry's experts say the completion of investments in the fields of mining and communication are a good example of objective reasons behind declining rate of investments. As for the subjective reason, Armenia's ready-made integration into the Eurasian Economic Union has sparked concerns among the investors, making them step back from investing in the small Caucasus country's economy.

Current situation in Armenia promises tougher days on the background of versatile degradation fueled by a deepening economic drawback. The government has already confirmed the stagnation in economy, revealing a failure to succeed the forecasted economic growth. Armenian economy is expected to grow by nearly 3 percent to seal the regression, which is also confirmed by the IMF and World Bank.

The ongoing developments in Russian economy urge the investors to think twice before placing their money in Armenia's economy. It's no secret anymore that the post-Soviet country's economy tightly depends on the economy of its northern neighbor and main trade partner.

The second half of the current year has turned to be tragic for Russian economy due to harsh sanctions by the western forces. The sanctions has paralyzed the northern giant's domestic markets, as well as inflicted heavy losses on its exports. Drastic fall in oil exports has caused a serious pain in Russia's economy, devaluating the ruble sharply.

The ruble's fall has led to a great panic in Armenia, as many families in the country survive on money transfers from Russia amid the absence of stable income sources. Ruble has devaluated by almost 30 percent since September and it is forecasted to lose more of its value in the next months. It means severe days in Armenia in near future, which make the investors to forget about Armenia.

Economic experts say the total volume of foreign investments in Armenian economy will expectedly fall by 25-30 percent in the upcoming months. Money inclosure in the South Caucasus country's economy decreased by 20 percent last year to $600 million.

Investors are reluctant to place their money in Armenia and the government seems not worried about the issue. Sedentary authorities in the former Soviet state resemble a couch potato, as they ignore to leave armchairs and delve into the solution of the problems facing the country. Modern Armenia now reminds its people of Santa Claus, which is an unreal creature with so-called mighty abilities to make the public wishes come true. Wishes have dashed in Armenia while waiting for the government to gladden the people and businesses of the country.

URL: http://www.today.az/news/regions/137639.html

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