Tag Archives: Armenia

Armenia PM wants more investment

YEREVAN, MARCH 9 2017 (The Conway Bulletin) — In an interview with the Reuters news agency, Armenian PM Karen Karapetyan said that he would be prepared to cut state spending to attract more private investment in try to reboot the country’s stalling economy.

In particular, Mr Karapetyan, who had previously worked as the head of the national gas distributor ArmRosGazprom and is known to retain strong links with Russia, said that he was looking to attract up to $850m of private investment this year to reduce Armenia’s reliance on Kremlin handouts.

“Regular structural reforms will be implemented in Armenia, even if these reforms are unpopular,” Reuters quoted him as saying.

Investors have been looking to the Armenian government for strong leadership. Mr Karapetyan, who took over in September 2016, is the third PM since April 2014. His two predecessors quit after failing to transform expensive state pensions and losing control of an armed takeover of a police station.

In 2015, the government also backpedaled over proposed reforms to electricity tariff increases that it wanted to impose after a series of large street demonstrations.

Armenia has been suffering from deflation and low growth rates, an economic downturn shared by the region which is dependent on Russia as an economic engine. Russia has been suffering from a recession triggered by a drop in oil prices and Western-led sanctions.

Mr Karapetyan said that he want to cut the government’s deficit to 2.7% of GDP from 5.9% in 2016.

“It will have a negative impact,” he said in the interview. “But we want to compensate it through private investment.”

ENDS

(News report from Issue No. 320, published on March 13 2017)

Armenia drives to attract Iranians

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FEB. 27 2017 (The Conway Bulletin) — The Armenian authorities have started discussing setting up Farsi learning centres, installing bill- boards aimed at Farsi speakers and a Farsi information hotline. Media reported the Farsi-language drive was a tactic to encourage more Iranians to visit Armenia.

ENDS

(News report from Issue No. 319, published on March 3 2017)

Deflation slows in Armenia

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MARCH 3 2017 (The Conway Bulletin) — Deflation in Armenia continued to slow in January, just as the Central Bank said it would earlier in the year. The National Statistics Service said that prices dropped by an average of 0.2% in February compared to the same period in 2016. In January, year-on-year deflation had measured -0.6% and in February 2016 it had measured -1.7%.

ENDS

(News report from Issue No. 319, published on March 3 2017)

Clashes take place in between Armenia and Azerbaijan

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MARCH 1 2017 (The Conway Bulletin) — A series of clashes in the disputed region of Nagorno-Karabakh between Armenia-backed rebels and Azerbaijani forces were being dubbed the worst since April 2016. On Feb. 27 Azerbaijan said that five of its soldiers had been killed in a firefight with Armenia- backed rebels who control the region under a 1994 UN-negotiated ceasefire which ended a war that killed 30,000 people. Two days later, the Armenia-backed rebels said one of their soldiers had been killed.

ENDS

(News report from Issue No. 319, published on March 3 2017)

Armenia to produce Solar panel

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FEB. 24 2017 (The Conway Bulletin) — Armenia will start producing solar panels later this year under a government-sponsored scheme designed to give solar-power a boost in the country, media reported quoting Hayk Harutyunyan, the deputy energy infrastructure and natural resources minister. He said that 50 jobs will be created at the plant which will begin production in Q3 2017.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Tablet production increases in Armenia

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FEB. 18 2017 (The Conway Bulletin) — Armenia produced 2,012 tablet computers in 2016, up from 932 in 2015, media reported quoting the national statistics service. The US-Armenian joint-venture Technology and Science Dynamics Inc started making tablets in 2014 under a headline scheme designed to try to turn Armenia into something of tech-hub destination. Last year it also started producing smartphones.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

9 parties/blocks to fight election in Armenia

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FEB. 21 2017 (The Conway Bulletin) — Armenia’s Central Election Commission said that five political parties and four political alliances will compete in a parliamentary election in April. The election is considered to be one of the most important in Armenia’s recent political history as a change in the constitution shifted power to parliament away from the president. Parliament will also be elected under new rules which mix proportional representation with directly elected candidates.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Armenia’s economic activity rises

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FEB. 20 2017 (The Conway Bulletin) — Armenia’s economic activity index, considered a key barometer of the economy’s health, was 6.5% higher in January compared to a year earlier. A 12% rise in industrial production was the biggest driver of the economic boost. Importantly, though, agricultural output was largely flat.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Armenia to receive power development lend from Iran

FEB. 16 2017 (The Conway Bulletin) — Iran will lend 83m euro to build a third power transmission line from Armenia, the Iranian media reported. Iran has become an increasingly important importer of electricity from Armenia over the past few years. Armenia has also increased imports of Iranian gas. Relations between the two neighbours have blossomed.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Armenia’s tumbling interest rate

FEB. 17 2017 (The Conway Bulletin) — >> How dramatic has these interest rates cuts been?

>> Very. Like a downhill skier racing to the bottom of the run, Armenia’s Central Bank have been determined and dogged. In mid-2015, the interest rate had been 10.5%. Now it’s at 6%, its lowest ever level. In November and December 2015, the Central Bank slashed rates by 1.75% but otherwise it has been a steady path, generally knocking off a quarter of a percentage every month or so.

>> But why has the Armenian Central Bank been in such a hurry to cut rates?

>> Basically, deflation has become the main driver of Armenian economic policy in the past couple of years. Price rises started to slow down in mid-2015, a sign of the tough economic times triggered by the recession in Russia. Within 12 months, prices had tipped into deflation. Earlier this month, the Central Bank said that although food prices had started rising again, non-food items were still dropping in price.

>> And what about going forward? Has there been any forward-looking guidance from the Armenian Central Bank?

>> A bit. The Central Bank has said that prices will remain soft in 2017 because the domestic economy is still limping along. It said non-food items, gas and electricity prices had all fallen in price. By cutting rates, it is trying to stoke economic activity. The risk is that a fall in interest rates will weaken the dram. It is now valued at 486/$1, its lowest since March 2016 and about 20% weaker than it was in mid-2014.

>> Is it a similar story in Georgia and Azerbaijan, Armenia’s neighbours?

>> Not exactly. In Georgia there has been some deflationary pressure on prices but not to the extremes seen by Armenia. Its Central Bank had also cut interest rates but it has now reversed this trend and actually put up rates last month. It also said that inflation would start rising this year. In Azerbaijan, as reported in The Conway Bulletin last week, prices are rising and fast. The major problem there has been the collapse in the currency. Azerbaijan is far more reliant on oil prices than Armenia or Georgia and has seen its currency halve in value over the past couple of years. This drop in the value of the currency has pushed up inflation.

>> What can Armenia do to stop deflation?

>> The deflation is slowly curbing itself. Food prices are rising and non-food prices are not falling as fast. Armenia’s economy closely follows Russia. The Russian economy is improving as oil prices rise, helping Armenia to recover too.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)