Effect of bailout steps already visible in Armenia

29.10.2009 10:56
Effect of bailout steps already visible in Armenia

YEREVAN, October 28. /ARKA/. Armenian government’s bailout measures have already produced some results, Finance Minister Tigran Davtyan said at a press conference on Wednesday.

I’m convinced that we’ll have better indicators in November and December,” he said. “These indicators will finally confirm the process of coming out of the crisis.”
According to statistical reports, Armenia’s GDP reduced 18.3% in Jan-Sept 2009.
Davtyan said that that the measures taken by the government are bailout in nature – that is why they are temporary.

“We will reduce these functions while going out of the crisis, since the government has not to do it in normal situation,” the minister said adding that the government is now performing functions of sluggish banks.

He said the government gave guarantees for AMD 4.5 billion ($12 million) to six construction companies – Elite Group sjsc, Hermek, Levon Amirkhanyan LLC, M.G. Housing LLC, Vahe Harutyunyan LLC and Avo F.M.H. LLC – to enable them to complete construction of apartment blocks.

Stressing that the government is gradually withdrawing from this area, Davtyan said that loans and financial resources are not received directly from the government – they are received from institutions, such as the central bank, the banking system, the national center for supporting small- and mid-scale business and the newly established the center-affiliated universal credit organization.

The minister said that large backbone enterprises constitute exception, and the government makes certain decisions for extending loans to them.
“But there is a limited number of such organizations, and we will gradually withdraw from this area.”

At its session held in Kapan on June 26, the government decided to lend $44 million to three mining companies - $15 million to Zangezur Mining for five years, another $15 million to Armenia Molybdenum Production for five years and$14 million to Agarak Copper and Molybdenum Combine for four years. ---0---

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