IMF REP WELCOMES LOWER GROWTH RATES IN ARMENIAN CONSTRUCTION SECTOR
Information-Analytic Agency NEWS.am
Sept 9 2009
Armenia
14:16 / 09/09/2009Nienke Oomes, IMF Resident Representative in Armenia,
welcomes the lower growth rates in Armenia’s construction sector.
Instability is typical of the construction sector. A price rise makes
everybody sell their real estate, whereas a fall in prices makes
people purchase it. Oomes said. Over the recent years this sector has
been rapidly growing in Armenia, and it is even better that slightly
lower growth rates have been registered, the IMP official said. On
the other hand, she pointed out that some growth in the construction
sector is beneficial for the country. So the Armenian Government is
right in promoting the completion of construction projects. Ms. Oomes
also pointed out the high importance of encouraging other economic
sectors, as the Armenian economy has over recent years been too much
dependent on the construction sector, Oomes said. According to her,
the construction sector accounts for 2/3 of the 18.5% economic decline
in Armenia this January-July. At present, she said, the worst moment
is past, the higher real estate prices and number of real estate
business being evidence thereof.
It should be noted that, according to some Armenian economists, it is
the "construction bubble blown" in the Armenian economy that accounts
for the strong effect of the global crisis on the country. So, they
say, it is wrong to fund the sector considered to be the main cause
of the crisis. The point is that the Armenian Government provided
guarantees to six construction companies, using the funds of foreign
loans. The companies are to complete the construction of six elite
buildings in the center of Yerevan. The same economists point out
that the flats do not sell, which means the investments have been lost.