Significant Losses in Trade and Services Sector, Economist Warns

Amid the escalating pandemic situation, the Ministry of Health is proposing new restrictions, one of which allows entry to restaurants, cafes, and cultural centers only for vaccinated individuals. Economist Suren Paryan discussed the potential economic consequences of this decision with the "Fact" newspaper, using the public catering sector as an example.

“It turns out that the sector will continue to operate if vaccinated individuals visit these places. Such restrictions exist in many countries around the world. The Armenian government also wants to follow this path, even though our vaccination rate is quite low. We do not have such a high rate that could allow the public catering sector to function based on the vaccinated individuals alone. In case of sharp restrictions, not only will economic activity be suppressed, leading to an economic downturn, but the government will also be forced to incur additional financial expenditures, as it did in 2020, while currently it is not ready to allocate such funds,” the economist stated.

He noted that the government’s actions are logical in some cases, but they are late: “The government’s actions are delayed because the virus was raging among us, yet appropriate steps were not taken initially. As a result, we have the worst indicators in the region, and we have an even worse picture in terms of deaths per capita. We record counter-records. The government has missed the time period to take action, and now it is trying to mitigate the consequences. No matter how much it tries to avoid a complete lockdown and create positive expectations, this situation will clearly impact economic activity. We not only lost lives but also economic growth, development, and expectations; we suffered negative consequences. The indicators of economic activity are gradually declining,” he added.

Suren Paryan reminded that since July, the economic activity indicator has dropped to 4.4 percent. “This indicates that we will have low economic activity indicators again for October and November. The coronavirus and the restrictions will undoubtedly have an impact. Moreover, negative expectations are also piling on top of this. Businesses are showing certain caution, for example, regarding opening a restaurant or a bar. In other words, there is also an impact on the investment environment and economic activity. The government is not currently publishing complete information that would allow us to assess what the economic consequences of the coronavirus have been in recent months, but it is evident that significant losses will occur, especially in the trade and service sectors,” Paryan emphasized.