Equalizing volumes of deposits and lending carries risk for Armenian economy

13.02.2017 18:08
Equalizing volumes of deposits and lending carries risk for Armenian economy

YEREVAN, February 13. /ARKA/. The volume of deposits at Armenian commercial banks is almost comparable with their overall lending, which carries some risks for the economy, economist Vilen Khachatryan told a news conference last Friday.

To substantiate he said the volume of total deposits at the end of 2016 stood at 2.413.3 trillion drams, while the banks’ overall lending was worth 2.436 trillion drams. The resulting margin was only 23 billion drams, down from 400 billion margin in previous years.

"Roughly speaking, if the volume of deposits grows more rapidly than the lending, the interests on the loans will not be sufficient for returning the deposits and the interests on them. This is quite risky as our economy appears unable to absorb such volumes of money (deposits), "- he said. He added also that an active refinancing process also carries great risks for the economy.

Such a situation, according to the economist, was created by the current economic situation in Armenia. In particular, the low economic activity and solvency of the population limit the ability of the banking system’s lending into the economy, while businesses and people are conservative trying to keep their savings in deposits. According to Armstat, the economic activity of the population in 2016 was 0.5%. --0-


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