In Armenia, world economic crisis touches on raw materials and real estate

The world economic crisis has affected the real estate market of Armenia and the sector of raw materials of the country. Ovsep Khurshudyan, expert on economy of the Armenian Centre for National and Strategic Studies, said that prices on copper and molybdenum, extracted and exported by the country, have gone down.

In his conversation with the "Caucasian Knot" correspondent, the expert has noted that private money transfers comprise investment elements, and the observed reduction of transfer inflow is affecting the real estate market, that is the consumer's ability that is in turn reflected in the prices for the real estate.

At the same time, Ovsep Khurshudyan has stated that the world economic crisis has little effect on Armenia because its domestic stock and currency markets are in embryo. However, the banking system was somehow affected. In particular, the rates on mortgage loans went up by 1-2 percent already, and the total sums of such loans have somewhat gone down.

Head of the Research Centre "Political Economy" Andranik Tevanyan has also reported that as a result of the world economic crisis the volume of money transfers arriving to Armenia from abroad, and, first of all, from Russia, has also dropped. It has affected some 600-700 thousand citizens of Armenia. Another sphere touched by the crisis is the real estate sector, where a price fall is observed.

The Minister of Economy of Armenia Nerses Eritsyan has noted that today it is impossible to estimate the scale of the negative effect caused by the international financial crisis influence on the economy of Armenia. As he said, the main problems can be related to investments and transfers.

According to the Central Bank of Armenia, in the third quarter of this year, the banking system of the country increased its total capital by 9.2 percent, that is up to 215 billion drams, the credit investments went up by 13 percent, that is, up to 593 billion drams (one US dollar is equivalent to 304 Armenian drams). By the outcomes of nine months of 2008, the net profit of the banking system of Armenia has reached 19 billion drams. Currently, Armenia operates 22 banks.