Baku, Azerbaijan, Feb. 2
By Azad Hasanli - Trend:
Armenia is slowly but surely moving to default. The Central Bank's foreign exchange reserves are rapidly declining; external and domestic debts are steadily increasing. The national currency rate reduced by 17 percent during the year and inflation will soon reach 6.5 percent.
Fitch Ratings' recent report, reducing Armenia's long-term rating from "BB-" to "B +", once again confirms the deterioration of the situation.
once again confirms the deterioration of the situation.
Fitch Ratings analysts said that moderate recession is expected to occur in Armenia's economy in 2015. The risk of its intensifying in case of deteriorating the economic situation in Russia and the possible negative impact on external imbalances and further devaluation pressure is expected to be observed.
Armenia has never had a strong economic model. The country greatly depends on the current situation in Russia. This added more fuel to the fire.
Moreover, current oil pricing has reduced the price on some commodities and Armenia can not benefit. The decrease in the price on copper produced in the country neutralized additional dividends from oil imported at a low price.
However, it is wrong to blame Russia or the world economic situation for the fact that Armenia is falling off a financial cliff. The influence of these factors of course can't be denied, but what prevented the country from minimizing them?
As the agency said, the easing of tension with Azerbaijan and improvement of relations with neighboring countries can affect the change in the country's rating.
Armenia long ago deliberately surrounded itself with an economic blockade. The conflict with Azerbaijan and the reluctance to release the occupied lands has led to the fact that Armenia remains aloof from regional development.
Azerbaijan's economic indicators continue to develop even in times of crisis.
Despite a slight decline in growth rate, the country will be able to compensate the impact of the "oil crisis" with help of the non-oil sector, as well as gas production, as noted in a recent report of the Standard & Poor's, which affirmed the country's rating at BBB-.
Apparently, instead of learning from neighbors, to receive dividends from cooperation with them, to strengthen the national economy and improve the well-being of its citizens and to take at least some measures to bring the country out of recession, it is easier for Armenia's government to continue to extort money from international organizations and its diasporas abroad.
Edited by CN
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Azad Hasanli is Trend Agency's staff journalist, follow him on Twitter: @AzadHasanli
