Hrant Bagratyan: The Economic Crisis Is Knocking on Our Doors Again

The economic crisis is knocking on our doors again. This was stated by the former Prime Minister of Armenia, Hrant Bagratyan, on his Facebook page.

“The economic crisis is knocking on our doors again. It is not only and not so much a result of the war and COVID-19 but also of the populist and shortsighted policies of the Armenian government and the Central Bank. For several years now, we have been saying that in the global world, a steady and smooth depreciation of the national currency's exchange rate (for instance, by 8-10 drams per year) is correct. Who and for what purpose has the Central Bank of Armenia 'stabilized' the dram over the last 2.5 years? The explanation is one: deception and populism. In this environment, the exchange rate of the dram is experiencing regular breakdowns. The quintessence of today’s economic crisis is again the exchange rate.

- In September-November, the Central Bank of Armenia’s reserves plummeted. In October alone, they decreased by $550 million.

- We are seeing a decline in exports.

- The share of dollar loans in the banks’ credit portfolio is increasing.

- There is a high level of dollarization of deposits.

- The decline in net transfers.

There is a continued outflow of funds from the country. And again, the Central Bank is doing just the opposite. In the short term, it must at least tie the mass of the dram (money). But we are witnessing some sort of dumb policy. It is also not less important for the current government, the prime minister who lost the war and treacherously surrendered lands, and the resignation of the President of Armenia,” he added.