Armenian economy becomes twice as passive in month

The level of economic activity in Armenia in January fell 49.2% in comparison with December, according to data of the National Statistical Service of the Republic.

Furthermore, there a reduction was recorded in several other parameters. In particular, the volume of industrial production in January decreased by 28.7% compared with December, and construction dropped 0.7%. The trade turnover in the country fell by 58.6%, while the year on year decline amounted to 2.7%. The volume of electricity generated fell by 6.9% in December.

The average monthly nominal salary fell by 19.5% in January in comparison with December, and by 3.5% in comparison with January 2015, Tert.am reports.

At the same time, according to the First Deputy Minister of Economy, Garegin Melkonyan, small and medium-sized businesses in the country showed the highest growth among the Eastern Partnership countries. The index is prepared in the framework of the OECD Competitiveness Program. In order to improve the figure, the Armenian authorities have to work on the availability of financial resources, cooperation between the small and medium-sized enterprises (SME) and small business’ entrance into the international market. In order to form a strategic approach to the issue in December 2015 the Armenian Government has adopted a Strategy on SME Development for 2016-17, News.am reports. Another dimension is the improvement of SME statistical indexes, which will help make the support mechanisms more targeted.

The head of the parliamentary faction of the Armenian National Congress, Levon Zurabyan, said in an interview with a correspondent of Vestnik Kavkaza that this decrease is related to the current Armenian political and economic system. "The government policy is now aimed primarily at supporting the monopolists and oligarchs, who are engaged in the import of consumer goods, so that the actual producers and exporters are at a great disadvantage," he said.

"Such a system could exist for a long time due to the high level of transfers from other countries, primarily from Russia, since the Armenian entrepreneurial class was expelled to France, America and Russia. And these transfer funds transferred to Armenia have created the purchasing power of the population," the politician explained.

Recently, however, he said that the real amount of transfers fell sharply due to the weakening of the ruble. "And such a model simply cannot exist anymore, resulting in the collapse and fall of all the economic indicators" the leader of the ANC faction pointed out.

Commenting on the statement of Garegin Melkonyan, Zurabyan said that in fact we cannot speak about any progress in the field of small and medium-sized businesses. "Business activity is declining, shops and production are closing, the number of jobs reducing. And basically it is precisely due to small and medium-sized business, but the monopolies manage to survive," the politician concluded.