“The more deteriorated is the economic situation in the world, the happier in Armenia. Did I understood correctly of what you said? You said that you have excessively great opportunities; like the Central Bank, so as the government, in particular, talked about the serious fiscal consolidation in our country. Which is it that we do not manage to know?” asked economist Vardan Bostanjyan to IMF Resident Representative Teresa Sanchez after her observations.
Another participant asked how fundamental are the media reports that some Russian companies and banks buy dollar in great quantities and transfer to Russia, because it is more expensive to buy in rubles in Russia. What mechanisms shall the government apply to prevent it? IMF representative preferred to answer to these and other questions in general rather than one by one, “You misunderstood me, I did not mean that the situation in the world is bad, while in Armenia it is not so bad. Simply, at this moment, the situation in Armenia is not so complicated as in a number of other countries. Approximately one percent decline in the economy will be registered in Russia and 6% in Ukraine. Armenia’s economy is still growing, it’s true that it is low of the potential level, but our goal is to assist Armenia to record an economic growth next year under the present conditions,” said Teresa Sanchez.
She said that the fiscal consolidation data are available, because during the previous crisis, the budget deficit sharply increased, now, it is quite low and is about 2 percent of GDP. “Now, let’s qualify it like that. Let’s call it a consolidation, regardless that there is no investment in our country, no activity is conducted,” interrupted Vardan Bostanjyan. IMF representative continued, “I did not say such a thing, what I am saying is that given the consolidation or deficit reduction, now, we have the opportunity, if necessary, to increase this indicator.”
Vardan Bostanjyan again interrupted, “I would oppose that you said that the budget will be performed by 100 percent, forty percent of the budget depends on the dollar. With regard to dollar fluctuations, how are they going to perform the budget by 100 per cent?” Teresa Sanchez continued, “It is a serious and important concern, I understand it, but the fact that the majority of capital expenditures is financed by international organizations and the funding is in dollars, it is already a problem, but on the other hand, the debts that are involved by international organizations are made at privileged conditions. If the situation further worsens, Armenia has the support of international organizations.” Some economists present in this discussion were dissatisfied with the IMF representative’s optimistic assessments, and some of them left the discussion still unfinished.
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Arpine SIMONYAN
