Armenia's economy fades without investment

  06 November 2017    Read: 946
Armenia's economy fades without investment

The investment promises of the Armenian Prime Minister Karen Karapetyan have failed. His policy of optimization did not solve the problem of improving the governance effectiveness in Armenia, and many Armenian experts note this.

On the contrary, the Armenian economy is even more stuck in problems now and the continuing inflation is one of them.

“Inflation is not good for overcoming poverty of the people. Of course, there is an inflation type that is useful for one thing – it replenishes the budget,” said Mikael Melkumyan, vice-chairman of the Armenian Parliament, while commenting on price hike observed in the country.

The Armenian expert community has no doubt that inflation in Armenia is encouraged by the government itself – for the reason Melkumyan voiced.

Since taking office last year, Karen Karapetyan promised the development of the Armenian economy due to a number of factors. In particular, he promised to bring investment in the country, but today it is not even felt when we look at the current state of the Armenian economy.

Even the statistical tricks of the country’s government were not able to hide the obvious fact that Karapetyan’s investment promises failed.

Recently, Armenia’s Minister of Economic Development and Investments Suren Karayan said that this year more than $1 billion of investment were made into Armenia, but noted that these funds include loans as well.

Commenting on this, an Armenian economist Vardan Bostanjyan said that it is difficult to trace investments, and the fact that loans were included in this figure demonstrates the unprofessional work of the government.

“This money is not seen, no one knows what projects it is invested in. Inclusion of credit funds in this figure is ridiculous. Investment supposes specific addresses, industries, results. If there are no addresses, then how to evaluate the effectiveness?” the expert stressed.

He further noted that with such figures, Armenia should have received an average of $200-250 million tax revenues a month in 2017.

"But in the nine months this figure was only $197 million. This means that the level of state revenues is sad,” Bostanjyan said, adding that the government is not going to raise salaries and pensions in Armenia next year.

Meanwhile, the failures of the Armenian government deteriorate the country's economy indicators. The recent preliminary data by the National Statistical Service of Armenia has showed that the economic growth is slowing down in the country. In January-August it averaged 5.5 percent but the data for September reduced the figure to 5.1 percent.

Moreover, there was a decline in agriculture and construction of Armenia during first nine months of 2017 – by 9.9 and 6.4 percent respectively. The growth of Armenia’s foreign trade has suffered as well – it was 24.4 percent in January to August but declined to 21.7 percent given September results.

Thus, the inability of the Armenian leadership to attract foreign investment and to fix the situation in the country's economy leads to its aggravation, and the relatively new Prime Minister Karapetyan could not meet the expectations of Armenia's population.

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