Armenia will overcome crisis within shortest terms

PanARMENIAN.Net - Fast spread of world crisis influence on Armenia testifies to Armenia's vulnerability to outer shocks, Economics and Values Research Center Chairman, Manuk Hergnyan told a news conference in Yerevan. "GDP slump in Armenia began simultaneously with Europe and USA GDP slump in the last quarter of 2008," he said. According to him, even Russia did not register such a rapid slump, despite the downfall it had to face in the first quarter of 2009.

Hergnyan noted that the opinion that Armenia has developed immunity against the world crisis on the strength of its weak integration in world economy is wrong. "Fast spread of world crisis in Armenia testifies to the fact that Armenia is actively interacting with world economies, though with the help of special mechanisms," he said.

According to Manuk Hergnyan, low rate of economy diversification in Armenia also influenced the spread of crisis, specifically export's concentration on mining industry and strong dependence on private transfers.

Besides, as opposed to other countries, where the crisis began with financial markets shocks, in Armenia it began with real sector of economy, which was conditioned by drastic slump in world prices for copper and molybdenum in August-December of 2008.

Research Center Chairman believes that reduction of transfers and drastic slump in the sphere of construction caused further intensification of crisis.

"We mustn't overlook the fact that March devaluation has had a positive effect on local production volumes, which will be proved in the second half of 2009," he added. Besides, weak participation of RA banking sector in economy saved RA financial system from crisis shocks in the first stage of its development.

"Financial can't last for eternity. Armenia will be able to overcome this one in shortest terms.

Previous crisis considered, Armenia will need around 4 years to return its GDP to pre-crisis level. Based on Armenian economy's quick reaction capability, we could infer that RA economy stabilization will take place simultaneously with stabilization of major economies," the Chairman concluded.