ArmInfo. Everything in Armenia has changed by 180 degrees. And this realization should lead to the need to change the policy in terms of the country's development prospects. Economist Vahagn Khachatryan expressed this opinion on December 17 at an online press conference.
"Signals of the vision of problems and ways of solving them should come from expert and professional platforms. We must all work intensively into long-term development programs. We need to make a big list of what awaits us in the next 5 years in demographic terms, which we know about, but have closed eyes on this in connection with the war in the zone of the Karabakh conflict, and did not want to hear and see about it.We knew very well that we were not ready for war, there has always been a dispute over these territories, and now we know that there is a problem of the Armenia-Azerbaijan borders, but it was beneficial for the authorities to live like that, "he said.
Speaking about the current situation in the foreign exchange market, namely about the devaluation of the dram, V. Khachatryan said: "What else could we expect? Especially under the conditions of martial law, and even against the background of the second wave of coronavirus with its rapid spread. Tomorrow has already arrived. The unprecedented rise in prices for food products on the international market has been observed since July and continues to this day, with the average food price index calculated by the FAO in July at 5.4%, decreasing to just over 2% in October.
But, if Russia has the opportunity and tools to influence the prices of various food products, for example, with regard to flour and sunflower oil, the prices of which have increased by 65% and more than 20%, respectively, the government is taking serious steps to regulate them - to establish a price cap, then Armenia does not have such opportunities.
And in such conditions, given the expected problems next year, incl. budgetary, despite the fact that international reserves are still at a sufficient level, the situation in the foreign exchange market could not be different. But the reason for the latter is not small players, but large ones - representatives of the business environment, who preferred to withdraw funds in the current situation. "He explained that it was precisely several large enterprises from several banks that, under various pretexts, withdrew funds for investments in different countries, which caused the excitement in the foreign exchange market. But the Central Bank nevertheless intervened by raising the refinancing rate (since December 15 by 1 percentage point to 5.25% - Ed. note) in order to keep inflation from exceeding the target level (4%, +/- 1.5). "Yes, this step is incomprehensible in the context of declining economic activity, but in any case served as a safety net. However, this will cause additional problems in the banking system and in terms of investments. In my understanding, we want to be more careful than usual especially in the financial market, which is that exclusive sector where everything is regulated, controlled and operates within the framework of logic, while in other industries logic has completely disappeared. This must be recognized. It is this uncertainty that pushes the public and the business environment to the steps that led to the current situation in the foreign exchange market, "he said.
V. Khachatryan emphasized two factors - external signals and internal uncertainty. Moreover, regarding the latter, he noted that it is difficult to predict which of these factors will further aggravate the situation. "This is the reason for the problems in the foreign exchange market of Armenia and in the economic life of the country. Serious problems are also seen in the investment situation - difficulties are inevitable in 2021 and 2022. How much expectations are justified next year will depend on the subsequent course of events around the Karabakh war, and regional problems ", V. Khachatryan concluded.
