Dubai Syndrome consequences don't threaten Armenian economy

PanARMENIAN.Net - Armenia shows interest in the processes occurring in UAE, one of RA's main trade partners, Ph.D. Candidate in Economics Samvel Avagyan said.

 

When commenting on information that Dubai World state company requested its creditors to freeze its debt till May 30, 2010, Samvel Avagyan noted that UAE total debt comprises USD 80 billion, which exceeds the county's GDP. At the same time, the expert added that another debt payment of the company is due until December 14. Still, after November 26 the company announced its insolvency.

 

"A 3-4% slump was registered at international stock market, constituting the largest slump in 2009. At present, the situation at US and China's stock markets became stabilized, what cannot be said about European stock markets, with them being main investors of major programs and clients for real estate purchase in Arab Emirates," he said.

 

Arabian crisis is caused by too posh, yet economically unjustified investment programs, according to Avagyan.

 

Nevertheless, he noted, the Dubai syndrome consequences do not threaten the economy of Armenia, having no investment partnership with Dubai World. Still, some indirect influence is possible, considering increasing dollarization in Armenia.

 

Besides, the second surge of crisis is possible, which could influence Armenia's economy, specifically, real estate sector. As the expert explained, Dubai Syndrome should be resolved at local level, allowing it to prevent a new wave of crisis.