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Devaluation Should Have Happened Earlier, Says ARF Rep.

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  • Devaluation Should Have Happened Earlier, Says ARF Rep.

    DEVALUATION SHOULD HAVE HAPPENED EARLIER, SAYS ARF REP.

    Yerkir
    Tuesday March 3, 2009

    YEREVAN (Yerkir, Yerkir Media)--The devaluation of the Armenian
    currency should have happened earlier and gradually, said Armenian
    Revolutionary Federation parliamentary bloc member and economist
    Ara Nranyan.

    He said at this juncture the Central Bank had no other choice by to
    devalue the dram.

    "Wouldn't it have made more sense that we took this step a while ago
    gradually?" asked Nranyan adding that the current sudden devaluation
    will create obstacles for businesses.

    At a press briefing Tuesday, Nranyan discussed Tuesday's decision to
    devalue the dram and other issues related to the effects of the global
    economic crisis on Armenia. He expressed opposition to the proposed
    tax increases on imported raw materials for domestic production and
    output, which he said would slow production and would impact prices
    for locally produced goods.

    Nranyan said local production and exports should be encouraged and
    the government should provide incentives for local production of
    goods in order to balance prices in these economic conditions.

    Nranyan noted that the ARF had recently met with Prime Minister
    Tigran Sargsyan and representatives of his economic team to discuss
    his party's proposal for the economy, adding that the ARF has always
    advocated support for local production and encouraged exports of
    locally-produced goods and services.=0 D

    "If these steps were undertaken three to four years ago, then the
    impact of the economic crisis would have been less," said Nranyan who
    acknowledged that certain steps to correct the situation are being
    undertaken but it may be too late.

    Nranyan said that the artificial inflation of the dram has primarily
    hurt local production and only importers have benefited from it.

    The ARF parliament member also touched on a recent report by the
    World Bank, which predicted zero economic growth in Armenia for 2009
    and government estimates that place growth at three to four percent.

    He said the current economic crisis has demonstrated that the
    government's continued touting of a double-digit economic growth
    was baseless, at best, adding that even if there is slight growth it
    would be better if it is stable rather than "registering self-serving
    economic growth."
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