Armenian economist warns about catastrophic situation in country

The corrupt Armenian government still lacks any scenario to overcome the economic crisis, while those in the state power are thinking of their own benefits, according to AzerNews.

Meanwhile, experts alarm that the situation is not likely to improve given the current economic indicators.

Economist Vahagn Khachatryan has recently announced that the 2017 budget is less than that of the previous year in all parameters

"The structure of the 2017-state budget of Armenia doesn’t differ from the old one,” Armenian media cites the economist as saying. "Explanations, rationales are very similar to the clarifications and explanations of the last year. Hence, I do not see any assessment of the new situation.”

Khachatryan stetted that this budget is created so that "we can exist in principle - to stay afloat”.

"There are current and former officials, who try to justify their actions for the past few years saying that the situation is not as catastrophic, but the situation is explicitly catastrophic. We faced numerous challenges”, the economist said.

Moreover, the economist revealed that the government should pay hundreds of public debt in the years to come, however, where to get this amount remains  unclear.

"The interest rate is higher for internal debts, but it is possible to agree with creditors (mainly banks) to freeze or postpone the payments,” said Khachatryan, adding that with foreign creditors this won’t work since if the time is up, you need to pay.

The state debt of Armenia amounted to $5.36 billion as of the end of the first half of 2016. Noteworthy, the forecasted GDP in 2016 amounts to 5.443 trillion drams. Consequently, by the end of the first half-year, the national debt of Armenia made up 46.7 percent of GDP, which is quite risky for the country’s economy.

The majority of Armenian external debt accounts for the government, the rest belong to the Central Bank of the country. But the greater part of the domestic debt is the bonds acquired by Armenian residents. By late June 2016, gross international reserves of Armenia made up only $1.57 billion.

Despite different positive assurances from the government on achieving a stable situation in the country, the economy is continuing to fail.

The authorities only strengthened the monopolies through destroying small and medium businesses, instead of creating a functioning economic model not depending only on transfers.