ECONOMISTS: TRANSFER WILL DECREASE, DRAM WILL BE DEVALUATED
Roza Hovhannisyan, Reporter
Business – Wednesday, 05 March 2014, 13:08
The Ukrainian economic crisis and devaluation of the Russian ruble
will affect Armenia negatively, said economist Vardan Bostanjyan in
an interview with Lragir.am.
“With devaluating ruble, we will have an undesirable situation with
remittances from Russia to Armenia, devaluation of the national
currency will be noticed in Armenia,” Bostanjyan said.
Note that devaluation of the Armenian dram was reported in February.
According to the National Statistics Service, in February the exchange
rate of the Armenian dram to dollar went up by 1%.
Although the economic cooperation between Armenia and Ukraine has
never achieved high levels, at this stage the economic relations
between Armenia and Ukraine are paralyzed.
Due to the developments in Ukraine the stocks of some Russian big
companies dropped recently. Vardan Bostanjyan says it will affect
the investment projects of Russian companies in Armenia.
“These ups and downs of the stock markets and investments, the same
process will take place in Armenia to the extent of devaluation in
that country. It is a very negative factor for the economy of Armenia,”
he said.
Nevertheless, Vardan Postanjyan says, this situation cannot be
considered a shock for the economy of Armenia but it will not be a
desirable development either.
The economist Vahagn Khachatryan also makes a pessimistic forecast.
“Our economy is based on remittances, 80% of that amount comes from
Russia therefore the developments in Russia will affect the Armenian
economy negatively,” Vahagn Khachatryan told Lragir.am.
“As to Ukraine, the huge impact of Ukraine developments on the world
economy was seen the day before when the stocks of Russian companies
dropped by 12%,” he said.
The developments in Ukraine will have a significant impact on Armenia
because Ukraine is Armenia’s fourth or fifth partner in foreign trade.
“There is no information whether imports from that country have been
disrupted but there are such concerns,” Vahagn Khachatryan said.
The economist thinks that investments in Armenia planned by Russian
companies for 2014 will be postponed due to decline of stocks of big
Russian companies.
“Attractiveness for investments has dropped essentially. There must
be peace for economic development. And in Ukraine there is no peace,
and peace in Ukraine affects the Russian economy, and if Russia has any
plans for Armenia, it will not consider investments after its stocks
plunge and the economy of Ukraine faces problems,” the economist says.
He thinks that the problems of the Russian economy are aggravating
day by day, and investors are leaving the Russian market due to the
policies of the Central Bank and government.
“And since we are now more attached to the Russian market, the impact
of the ongoing developments on our economy will be direct. Let’s
take any Russian company, whether in the sphere of energy or
telecommunication. Let’s look at the investment program of the South
Caucasian Railway for 2014. No essential investments that would change
the railway operation are found there,” Vahagn Khachatryan notes.
The economist cannot see positive developments in the foreign exchange
market either. According to him, decrease of remittances will cause
devaluation of the Armenian dram.
“Second, we must also look and see what the Central Bank and the
government want. There is no growth in our economy, therefore there
will be a growth of prices of imported goods, which will add pressure
on the pockets of consumers, our buying capacity will fall accordingly,
we will appear in a closed circle as long as the system is based on
this logic, a system where there is no competitiveness,” he noted.
Meanwhile, market competitiveness would enable using devaluation for
developing the internal economy.
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