Armenian banks need 2 years to restore pre-crisis revenues

PanARMENIAN.Net - “Social and economic development, as well as financial stability of Armenia were in the focus of the meeting, head of the Central Bank of Armenia (CBA) Arthur Javadyan said upon its completion. “Armenia’s banking system makes around 91% of the country’s entire financial system. Thus, major part of indices depends on stable development of the banking system. The Armenian government and government exert efforts to half by the year-end the inflation rate recorded early in 2011. Inflation is a severe illness, which specifically affects socially vulnerable groups of population,” said Javadyan.

According to chairman of the Union of Banks of Armenia, the interests rates in Armenia are lowering and the tendency will be preserved in the future. Anelik Bank board chairman shares the opinion.

Head of the Financial Stability and Development Department at the Central Bank of Armenia (CBA) Vahe Vardanyan said, for his part, that trends in global financial and commodity markets, as well as developments in neighboring countries in 2010 were favorable for Armenia.

Armenia’s economic growth would have been much higher, if it were not for 15% drop in agriculture.

According to clarified data, 2.1% increase was recorded in Armenia’s economy in 2010, including 9.5% growth in industry, what is an evidence of industry’s recovery after the crisis. 28% increase was recorded in loans allocated to business entities in 2010 that facilitated industry’s recovery. Besides, 30% drop was recorded in the state budget deficit in 2010, what in its turn had a positive impact on financial stability.

As a country exporting copper and molybdenum, Armenia managed to improve the deficit in trade turnover in 2010, since around 42% growth was recorded in export, while import increased only by 13.9%.

At that, Armenia considerably depends on fluctuations in global prices for oil, though the country is not among oil exporters.

18.4% growth was recorded in remittances in 2010. Though the index has not reached the pre-crisis level, it displays rather active trends.

In all, economists are confident that Armenia’s banking system is steadily developing. However, to restore pre-crisis revenues, about 2 years are needed.