According to the survey, 42% of respondents (55 people) were absolutely convinced that Greece would not be able to avoid default in the near future. Another 37% of the respondents (48 people) did not believe that could happen in the coming months. Only 8% of respondents (10 people) found it difficult to give a concrete answer to the question whether they expected a European country to default any time soon.

According to the survey, 6% (8 people) said Italy would be the first toa default, 5% (7 people) thought it would Spain and 2% (2 people) though it is Portugal.

The online survey, conducted from October 27, 2011 to February 10, 2011, embraced 130 visitors. The www.armbanks.am, www.bonds.am, www.anticrisis.am were launched by ARKA as part of a strategy to boost its businesses. In addition to timely information they offer also analyses and exclusive content, information on banks, insurance and credit institutions, their financial indicators and statistical information. -0-

“I would like to be optimistic, but so far it is impossible. It is clear that EU will need to build closer integration within itself and head towards what could be called as the United States of Europe in order to exit strong from the current crisis and become strong enough to compete not only with the United States, China and Japan, but also with members of ASEAN, Brazil and India,’ he said during an online interview in response to a question from ARKA news agency.

Andrei Ryabov’s interview was part of South Caucasus Security and NATO project which interviews leading experts and political leaders from different countries for Armenian, Azerbaijan, and Georgian media. This is the project of ‘Region’ Armenian center backed by NATO’s Public Diplomacy Department.

According to Ryabov, the Europeans do not have either the will or the leaders who can implement these ambitious goals.

“The second problem is that Europeans should abandon the relaxed lifestyle and part of social security benefits, otherwise it would be difficult to compete with China and ASEAN. It seems that the Europeans are not ready for this challenge either,” he said. -0-

He told ARKA News Agency that integration degree is very high in the world, and not a single county that has trade ties with European Union can’t avoid impacts of Europe’s current problems.

Minasyan said that every country is trying to lessen possible impacts of the recession by using own instruments – Armenia is trying to diversify its economy to cushion adverse impacts.

He also stressed that it is still not known how severe the upcoming crisis will be. Therefore Armenian economy should be prepared for the worst. -0-

The report says Uzbekistan’s economy will see the largest growth among CIS countries in 2012 and 2013 – 8% and 6.5% respectively, while the lowest forecast of 0.5% is for Belarus. The forecast for Azerbaijan in 2013 is 3%.

‘Developing countries should be ready to risks of slowing economic growth, as the eurozone’s debt problems and weakening growth in some emerging markets reduce the prospects for global growth,” the report says.

The World Bank has lowered economic growth forecast for 2012 to 5.4% for developing countries and to 1.4% for countries with high income (minus 0.3% for the eurozone) compared with its estimates last June, which were respectively 6, 2% and 2.7% (1.8% for the euro area).

Global economic growth, according to current projections, would amount to 2.5% and 3.1% in 2012 and 2013 respectively. -0-

He said that two conferences had been held under the auspices of the Republican Party of Armenia to promote exports.

“We expect considerable progress in 2012,” he said.

On December 15, the government approved the strategy of export-oriented industrial policy, which was presented at the Republican Party’s conference.
Minasyan said that expectations from raw materials and science-consuming industry are especially high.

Their development can build up Armenia’s industrial capacity and make the country’s economy and particularly exports more diversified and ready for possible adverse developments.

Armenia’s foreign trade turnover grew 10.2% in November 2011, compared with the same month a year earlier, to $504.5 million or AMD 192.8 billion.

The country’s exports totaled $124.1 million or AMD 47.4 billion in November after growing 22.3%, compared with November 2010, and imports totaled $380.4 million or AMD 145.4 billion after growing 6.7%.

As a result, negative balance of foreign trade amounted to $256.3 million or AMD 98 billion in November 2011.

Exports grew 9.9% in November, compared with October, as imports shrank 2.8%. -0-

“There have been some improvements in the business environment but still we think that much more needs to be done. Especially in the current conditions Armenia faces an increasingly pessimistic and adverse global environment. Armenia always faces a very difficult geopolitical situation. So the country cannot afford anymore to have the difficult business environment that it now has,” he warned.

Tolosa reaffirmed IMF warnings that Armenia could be adversely affected by Europe’s sovereign debt crisis if it slows economic growth in Russia and causes international commodity prices to fall. But he said the fund still thinks that the Armenian economy is “most likely” to grow by about 4 percent next year.

“But the risks associated with this target are increasing by the day,” added the IMF official.

The IMF representative warned that a possible political instability after next year parliamentary elections would have an adverse effect on the economy.

According to official data, Armenia’s debt to IMF stood at $795.8 million as of September 30, 22.6% of the country’s foreign debt HAVING grown by 7.4% from the beginning of the year. -0-

In his first live interview since his sacking Kudrin said it would be difficult to implement the budget if the global economic situation worsens, noting also that the country’s budget is 40% dependent on oil revenue. His disagreement with higher military spending in particular led to a harsh criticism from Medvedev and a subsequent departure.

Kudrin said he sees danger of a recession in the euro zone, the probability of which he sees at 70%, which in turn may cause difficulties in Russia’s plan to borrow RUB800 billion in 2012 and get the needed revenue from oil. He noted Russia still has its rainy-day reserve fund, which will last for a year if oil prices drop below $80 a barrel.-0-

“A new world is being formed before our eyes,” he said. “New rules of differentiation of labor are among this new world’s characteristics. We are also witnessing formation of new economic centers.”
Sargsya said that Armenia should work out a policy able to cushion the country from shocks coming from the outside.

He said that the modern world is peculiar for the locomotive power of knowledge production that propels development of the world economy.

“If we want to build competitive, forward-looking economy, we should pay special attention to those areas based on knowledge,” he said. “It means that education establishments and universities’ activities will be very significant for formation of competitive economy.”

The premier said that favorable environment should be created for intellectuals to enable them to apply their talent and knowledge.

“This is also very important for formation of a new economic model,” he added. –0—

Speaking about the bank’s strategy in this context she said no major changes should be expected. According to her, the culture of the structure is conservative enough in itself, so the bank should not change its strategy, and be instead more prepared and informed of ongoing developments.

Ms. Clifford said the bank always gives his clients this advice to help them in the long term to avoid difficult situations, but at the same time the bank is active, opening new branches and expanding its loan portfolio.

She also said no serious changes in the exchange rate of currencies should be expected, which are affected by the amount of money transfers from abroad. According to Central Bank of Armenia, individual remittances to Armenia in September 2011 grew by 14% year-on-year to $180.7 million. According to ARKA data, HSBC Bank Armenia’s aggregate assets stood at 103.9 billion drams as of September 30.

HSBC Bank Armenia cjsc was the first international bank to open in Armenia in 1996. The bank is a joint venture between the HSBC Group, which has 70 percent ownership, and members of overseas Armenian businesses. The bank offers a wide range of products and services to individual as well as corporate customers, including personal financial services, commercial banking and treasury and capital markets services. Thanks to the HSBC network in 88 countries and territories, the bank is uniquely positioned to provide truly international services for its customers.  ($1- 384.32 drams). -0-

Moody’s decision to change the outlook on Armenia’s sovereign ratings to negative is primarily driven by the country’s ongoing economic vulnerability to the weaker growth prospects in Europe and Russia, which together account for 58% of Armenia’s export market. In particular, Armenia’s reliance on exports to, as well as remittances and foreign direct investment from, Russia poses risks to its external position. In addition, potentially lower commodity prices could further affect the Armenian economy as exports are concentrated on mining, precious stones and metals (representing 73% of exports in 2010). Although Moody’s currently still expects moderate growth in the next two years, the rating agency believes that the downside risks are significant given the weak global economic growth outlook.

The second driver of the outlook change is the risk to Armenia’s shock-absorption capacity as the country enters another economically challenging period with weakened debt metrics and a more vulnerable external position. Moody’s notes that the country is now faced with a large current account deficit (estimated to be 11% GDP in 2011) and a government external debt ratio that has doubled to 35% in 2011 from 14% of GDP in 2008. Its total debt burden in relation of GDP is now 39% compared with 16% in 2008.

Despite the change in outlook, Moody’s notes the government’s commitment to fiscal consolidation, as illustrated by the measures contained in the draft 2012 budget law which are aimed at reducing the general government deficit to 3.1% of GDP next year. These measures are in addition to the government’s efforts to enhance the efficiency of tax collection. The impact of such measures however will remain unclear for some time and the implementation risks to the fiscal consolidation plan are significant, particularly given the uncertainty surrounding Armenia’s growth prospects.

Concurrent with this action, Moody’s has revised to negative the outlook on the Ba3 country ceiling for foreign-currency deposits. At the same time, the country ceiling for local-currency debt was downgraded to Baa1 from A3, bringing it in line with the country ceiling for local-currency deposits, which was affirmed at Baa1. The country ceiling for foreign-currency debt was affirmed at Baa3 and its outlook remains stable.

Although unlikely in the short-to-medium term, Moody’s would consider changing the rating outlook on Armenia back to stable in the event of a dissipation of the risks posed by the country’s external vulnerability to low growth prospects among its main trading partners. Moody’s would consider downgrading Armenia’s sovereign ratings in the event of a failure to achieve its fiscal deficits reduction plan; and/or a continued large current account deficit caused by prolonged weakness in commodity prices and/or remittances; and/or ) a decline in FDIs, thereby eroding the sustainability of the country’s external position. -0-