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Forecasts for Armenia's economic growth crush hopes for improvement

22 July 2015 [09:45] - TODAY.AZ

By Sara Rajabova - AzerNews 

It seems that the worst is yet to come in Armenia. The economic situation in the country continues to worsen with a collapsing national currency and rapidly increasing state debt.

The hopes for some kind of normalization are decreasing day by day. Despite the Armenian government’s good for nothing optimism, the country’s economy is expected to decline further.

Armenian media has reported that Armenia's economic growth will be even lower than the expected one percent.

As the decline in oil prices continues, leading to new problems in the Russian economy, the Armenian economy, which is dependent on transfers and remittances from its ‘big brother’, is also indirectly taking a hit from this fall.

Such a situation, in turn, gives ground to say that private transfers from Russia to Armenia will continue to decline.

The experts believe that this trend does not bode well for the Armenian economy. The government predicted a rate of growth of only one percent for this year, however, this calculation is based on a steady level of transfers.

The newspaper Haykakan Zhamanak writes that this forecast is followed by the lifting of the international sanctions on Iran after a final nuclear deal. This is expected to lead to negative consequences for the expected revenues from the sale of Russian oil and in turn, to a decline in remittances from Russia to Armenia.

Thus, such a continuing persistent decline in remittances can lead to a situation whereby the growth of the Armenian economy will be lower than the expected one percent.

After the recession in Russia, the economic situation in Armenia has worsened due to the decrease in money transfers in to the country. Money transfers from Russia to Armenia decreased by 40 percent, which consequently, led to a significant drop in government’s revenues.

In addition, the foreign trade continues to experience unprecedented decline in Armenia. The latest data released by Armenia’s National Statistical Service showed that foreign trade is the most disappointing figure among its economic indicators.

Foreign trade turnover in Armenia, according to updated statistical data, decreased by 29.8 percent, totaling about $ 1,933 billion in January-June 2015, when compared to the same period of time in 2014.

Armenia’s National Statistical Service said the volume of exports during the reporting period amounted to $624.8 million, decreasing by 11.2 percent compared to the same period in 2014.

In the meantime, the volume of imports decreased by 36.2 percent to $ 1,308 billion during the reporting period. As a result, the negative balance of foreign trade in January-June amounted to $683.1 million.

Against the backdrop of these desperate figures, optimistic forecasts by the Armenian prime minister come to mind. Prime Minister Hovik Abrahamyan has repeatedly stated that the Armenian economy will experience economic growth by several percentage points in the current year.

However, the ever-deteriorating indicators of Armenia’s woeful economy leave no room for Abrahamyan’s optimism.

URL: http://www.today.az/news/regions/142348.html

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