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Expert: Armenia on edge of insolvency, default

28 October 2016 [17:49] - TODAY.AZ

By Azernews


By Rashid Shirinov

Armenian economist Vahagn Khachatryan has admitted that the country is on the verge of insolvency.

Khachatryan announced about this while commenting on the statement by Armenia's first president Levon Ter-Petrosyan, who said that the country may face default soon.

The expert stated that the Armenian government, state and other officials also confirm this problem.

Armenia’s external debt is growing, as well as the budget deficit; economic growth is significantly lower than it was foreseen. As of late September, the country’s external debt hit $5.6 billion, while 5.1 billion of them is the debt of the government, and 500 million – of the Central Bank.

While considering the size of the budget and national debt, it is obvious that Armenia is in quite a problematic situation, Khachatryan noted. “The country has problems even in servicing the public debt, and this allows to say that Armenia is on the verge of insolvency.”

 “The economy is collapsing, there is no economic growth, and resources either are limited or exhausted. The government should have been thinking about correcting the situation through new approaches,” the economist warned.

Khachatryan believes that the economic chaos can be somehow prevented through the fight against corruption and the shadow economy.

Along with the large-scale corruption, the Armenian economy also has a problem of “monopolies”.

Monopolies keep Armenian economy from developing, recently said  Mark Davis, Head of the Yerevan Resident Office of the European Bank for Reconstruction and Development (EBRD).

Davis said the regulations in the field of taxation also hinder the development of small and medium-sized enterprises in the country, limiting the access of new companies into economy.

Speaking about the fight against monopolies, Mark Davis said that to be able to succeed you should first clear the field. “The political factor is important here; you need to be allowed to clear the field,” he added.

However, it is obvious that neither the fight against corruption nor the struggle against the shadow economy and monopolies work in Armenia. A clear example of that are the Armenian population, who do not even expect this from their authorities and prefer to leave the country.

URL: http://www.today.az/news/regions/155567.html

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