High inflation rate and foreign debt are main impediments to Armenia's economic development, analyst

As a result of the global economic recession, the total economic output in CIS countries made 7% in 2009, according to Nickolay Ivchenko, Head of ForexClub companies' information and analysis center.

Analyses show that the country suffering maximum losses was Latvia while Kazakhstan easily overcame the crisis impact, he told journalists on Monday, adding that reduced transfers and imports from Russia were the main cause of Armenia's economic downfall.

According to Mr Ivchenko, the main reasons leading to a downfall in Armenia's economy have been a reduction in private transfers from Russia and the reduction in scales of Armenia's exports.

Analyses have also shown that high inflation rate and large amounts in foreign debt were the main impediment to the economic development in CIS states, including Armenia

Michael Verdyan, analyst of "ForexClub" companies' group, said in turn, that Armenia's GDP fall, which made about 15% last year, was conditioned by the negative indices in construction (42.3 %) and trade (4%) sectors.

Speaking about the current year's economic growth, the expert said it was accounted for by the positive indices in industry
sector.

By the end of 2010, Armenia's economic growth is expected to be 3.7 per cent, which is lower than it was in the first half of the year.

According to Andrey Dirgin, Head of the Analytic Department of ForexClub, Armenia's economy is not open and will remain so unless the land connection with Turkey is re-established.

The foreign trade turnout between the two countries is carried out via transit routes, which leads to increased prices on products, he said, adding that compared to Georgia and Azerbaijan Armenia is overcoming the crisis impact more easily.