YEREVAN, February 15. /ARKA/. The global financial crisis had a severe impact on Armenia highlighting need for further reforms, European Bank for Reconstruction and Development says in its Transition Report, which will be presented in Yerevan on February 16.

“The global financial crisis has underlined Armenia’s economic dependence on the remittance-financed construction sector. The switch to a floating exchange rate and subsequent depreciation of the dram has eliminated the exchange rate misalignment and helped to improve export competitiveness,” the report says.

However, to channel remittances and foreign direct investment (FDI) into a wider range of industries, the business environment needs to be improved through better enforcement of anti-monopoly measures and a reduction in the administrative burden on small and medium-sized enterprises (SMEs).

EBRD Principal Economist Helena Schweiger said, “Long-awaited improvements in the business environment must now be implemented to increase competition, attract more local and foreign investments and pave the way for a sustainable economic recovery.”

In 2010, the EBRD argues, Armenia should move from crisis management to stimulating long-term economic growth.

“The banking sector will play a key role and the Central Bank of Armenia must continue strengthening the local banks and increasing financial intermediation”, the EBRD said in its report.

According to National Statistical service of Armenia, GDP reduced 14.4% in 2009, compared with the previous year, to AMD 3165.5 billion. ($1 = AMD 381.12).-0---