Azerbaijan, Baku, March 4 /Trend Capital, U.Ismayilova/ 

Given the economic situation, the Armenian government may officially announce a default, Azerbaijani Cabinet of Ministers Economy and Finance and Credit Policy Department head Ogtay Hagverdiev said.

"It will take time to restore the country's economy. A revolt among the people may begin in the meanwhile," he said.

There is no production in Armenia outside the diamond industry, which is currently experiencing stagnation due to a lack of financial resources, Hagverdiev said.

"Armenia is completely dependent on foreign loans. Given the ongoing situation, the country has become insolvent and this is leading to bankruptcy. Armenia has huge debts. The country will continue to experience difficulties due to a lack of a financial 'air bag'," he said.

The Central Bank of Armenia decided to limit interventions on the currency market and return to a floating rate policy. The Central Bank expects the average exchange rate to be 360-380 drams to one dollar in 2009. Moreover, the Armenian Central Bank Council raised the refinancing rate by 1.0 percentage point to 7.75 percent.

Do you have any feedback? Contact our journalist at: capital@trend.az