Wednesday, 6 June 2018

Armenian News... A Topalian...European Commission: Trade parts of Armenia-EU deal apply as of today, Armenia
June 1 2018

The parts of Armenia-EU agreement related to trade will also apply as of today, European Commission said in a statement.

As reported earlier, the EU-Armenia Comprehensive and Enhanced Partnership Agreement, which was signed on 24 November in the margins of the Eastern Partnership Summit in Brussels provisionally applies as of today.

The European Commission said the parts of agreement related to trade will enable the EU and Armenia to, for example, work to enhance the regulatory environment in Armenia, thus improving the business climate and investment opportunities for Armenian and EU companies.

[some misleading minus signs in the following article]

Arminfo, Armenia
May 31 2018
World Bank improved forecast of GDP growth in Armenia for 2018 from the previous 3.8% to current 4.1%
Karina Melikyan. 

The World Bank improved the forecast for GDP growth in Armenia in 2018 to 4.1% against the previously projected 3.8%. As noted in the WB's May report on the economy of Europe and Central Asia, in 2019 the forecast for GDP growth in Armenia did not change - 4%.

In this report, the WB notes that the agricultural sector of Armenia will reach a 2.5% growth in 2018 and will accelerate the growth rate to 2.7% in 2019. The industrial sector is projected to grow by 5.4% with a slowdown to 5.2% in 2019 services sector will show in 2018 an increase of 3.9% with an insignificant slowdown to 3.8% in 2019.

The growth of private consumption, according to the updated report of the World Bank, will grow by 5% in 2018 with a slowdown to 4.7% in 2019. Gross fixed investment will grow by 4.5%, with a slowdown in 2019 to 4.2%. Exports and imports for 2018 are expected to almost the same growth - by 10.1% and 10.3%, respectively, with a slowdown in 2019 to 9.8% and 9.5%.
In the consumer market of Armenia, according to the new forecast, inflation in 2018 will be 3.5%, and in 2019 - 3.8%.

The share of net foreign direct investment (FDI) in GDP in 2018 will be 4.4%, and in 2019 - 4.5%, and the ratio of current account deficit to GDP for 2018-2019 will grow from 2.9% to 3.5% . The deficit of the state budget of Armenia in GDP from 2.6% in 2018 will decrease to 2.5% in 2019. The share of national debt in GDP for 2018 is expected at 58.6%, with a slight decrease to 58.3% in 2019. The poverty level (at a purchasing power parity (PPP) of $ 5.5) could reach 38.2% in 2018, with a decline to 36.8% in 2019, and in terms of PPP of $ 3.2, the poverty level could fall in 2018-2019 from 10.1 % to 9.1%.

Armenia's economic outlook remains positive. The strong performance in 2017 suggests the opening of a window of opportunity to undertake the reforms needed to make growth inclusive and sustainable. On the assumption of sustained favorable external economic conditions and robust structural reforms, medium-term growth is forecast to be around the potential growth rate (4 percent), supported by private- sector, export-led activity. In particular, the agribusiness, information and communication technology (ICT), and tourism sectors are expected to deliver solid growth as efforts to boost competitiveness and connectivity start to deliver results. As the economy continues to grow and incomes rise-and remittance inflows continue to support livelihoods thanks to a benign external environment-the absolute poverty rate is forecast to decline to 8.1 percent in 2020. Although price pressures are forecast to increase in the short term, mainly due to higher customs duties and excise taxes on fuels starting in 2018, inflation is projected to remain within the official target range. The new Tax Code, which becomes fully effective in 2018, lays the foundation for better tax administration and higher tax revenues. Implementation of the upgraded fiscal rule (approved in December 2017) will result in stronger discipline for current spending and will provide some room to increase growth-friendly capital expenditures while also stabilizing and eventually reducing the public debt.

Armenia's vulnerability to economic conditions in Russia and its other trading partners- as well as its low level of exportdiversification-will remain high.Adverse shocks linked to the Russian recovery or metal export prices would have a negative impact on economic growth rates over the near to medium term. Fiscal slippage could trigger the need for sharper adjustments in public spending, undermining domestic demand and real economic activity. Fiscal policy should remain prudent to contain public debt levels. Avoiding fiscal procyclicality will help prevent macroeconomic imbalances and reduce the risks associated with overheating (including potential competitiveness losses) during periods of strong economic growth. Continuing coordination with the monetary authorities and the maintenance of a flexible exchange rate will be vital to avoid episodes of real exchange rate appreciation that can lead to losses in competitiveness. Sustaining robust economic growth will require bold structural reforms-such as providing a fair and competitive business and investment environment-to address fundamental problems in Armenia's economy. Increasing country-wide access to economic opportunities will help to boost household incomes and drive a further reduction in poverty, particularly in secondary cities where poverty is highest.

To note, in 2017, Armenia's GDP grew by 7.5%, with the agricultural sector in a 4% decline, the industrial sector showed an 8% growth, and the service sector - 10.5% growth. Private portfolios grew by 8.8%. Gross fixed investment grew by 7.3%. Exports showed growth of 23.2%, and imports - 24%. Annual inflation was 1%. The ratio of current account deficit to GDP was 1.7%, the share of net foreign direct investment (FDI) in GDP was 4.1%, Armenia's state budget deficit in GDP was 4.7%, the share of state debt in GDP was 58.8%. The poverty level in 2017 was 39.9%, down from 43.5% in 2016.

PanArmenian, Armenia
June 2 2018
Russia Foreign Ministry edits wording regarding Armenia’s Karabakh stance 

The Russian Foreign Ministry appears to have edited the response by Deputy Director of the Information and Press Department of the Russian Foreign Ministry Artyom Kozhin to a question by an Azerbaijani journalist about Armenia’s stance on the settlement of Nagorno Karabakh conflict.
The journalist said, in particular, that in one of his recent interviews, the Armenian Prime Minister stated that "negotiations on the settlement of the Karabakh conflict are impossible without the participation of the illegal regime created in the occupied territories of Azerbaijan”. He further asked how much these statements “complicate the settlement process and prevent the parties from finding a common language”.

According to the video of the briefing published by various media outlets, Kozhin said: “Generally, loud statements that do not fit within the tracks laid down, in particular, by the OSCE, probably, seem to be non-constructive.”
In the edited version of the Russian ministry’s transcript of the briefing, however, the Foreign Ministry has replaced the word ‘generally’ with the word ‘your’, which leaves the impression that the response is addressed to the Azerbaijani journalist’s provocative question.

The statement of the Russian Foreign Ministry has been largely criticized in the various circles of the Armenian society, as well as by a number of officials who took to social media to express their discontent regarding the incident.

JAM News
June 1 2018
Large network of Armenian supermarkets dodging taxes for years

Customers are worried that products prices may rise after the illegal activities of the Yerevan City supermarket network was exposed

The National Security Service of Armenia has been exposing the illegal activities of large enterprises such as Yerevan City, one of the largest supermarket chains in the country who has been evading tax payments for years.

The network is part of the Alex Holding company which belongs to Samvel Aleksanyan, a businessman within the circle of the former Armenian authorities. He was elected as a member of the Republican Party, led by Serzh Sargsyan, the former President of Armenia.

In order to evade taxes, a criminal scheme was developed, involving fake individual enterprises created under the names of hundreds of citizens.
According to the National Security Service, an agreement was concluded with the former leadership of the State Revenue Committee: supermarket products were purchased from farmers and then sold through these fake individual enterprises. The sales threshold of products sold by these enterprises is limited, which allowed them to pay a turnover tax of 2% instead of 20% VAT (value added tax) and income tax.

According to preliminary calculations, the total turnover of the 461 fake enterprises amounted to over 40 billion drams, of which only 2% in tax was paid instead of 20% if Alex Holdings acted within the law.

And all this was done under the pretext of avoiding an increase in prices for local agricultural products.

It is still unclear whether local agricultural products will become more expensive now that Alex Holdings has been exposed. Buyers are concerned that prices for local vegetables and fruits may rise.

Economists say that Yerevan City supermarkets monopolized the market and acted from a position of dictating prices. In this regard, they consider a rise in prices possible. However, Arthur Khachatryan, the newly appointed Minister of Agriculture, said that Yerevan City is not the only company engaged in this activity and so prices will be determined by the market., Armenia
June 1 2018
New Armenia government grants customs duty exemption to tycoon MP’s textile company 

During its Cabinet session on Friday, the government granted import customs duty exemption to the textile company that belongs to the family of former ruling Republican Party of Armenia MP, oligarch Samvel Aleksanyan.

Artsvik Minasyan, the Minister of Economic Development and Investments, submitted the respective draft decision to the Cabinet meeting.

As per the decision, this import customs duty exemption will be granted to the said company within the framework of the “investment program being implemented in the top domain.” 

To note, however, the National Security Service of Armenia recently exposed a large tax evasion scheme at the supermarket chain stores belonging to Aleksanyan’s family.

ARKA, Armenia
June 1 2018
Head of Armenia’s state water committee denies stealing $13 million

The head of Armenia’s State Water Committee Arsen Harutyunyan, who tendered a resignation application today, denied a report in the local ‘Zhamanak’ (Time) daily claiming that together with former prime minister Karen Karapetyan he stole $13 million.

"In my department there is no corruption . Besides, I not only refute the report claiming that I stole a large sum of money, but I also demand that it apologize and publish a repudiation," Harutyunyan told journalists on Friday.

The daily Zhamanak quoted Arsen Harutyunyan as saying earlier this week in the Armenian parliament that since the beginning of the year the water level in Lake Sevan has risen by 30 cm. The newspaper writes that in fact the level of the lake, when compared with the same time span of last year, in fact decreased by 13 cm.

The daily claims that the water was in fact used to generate cheap electricity by the cascade of water power plants on the River of Hrazdan, which was then sold to Armenian consumers at a high price.

According to the daily, a drop of 1 cm in the water level in the lake costs about $1 million, thereby a drop of 13 centimeters translates into $13 million. It claims that the money was pocketed by Karen Karapetyan and Arsen Harutyunyan.

Harutyunyan also stated that he resigned because he can not work with the new government of Prime Minister Nikol Pashinyan. 

MediaMax, Armenia
June 1 2018
8 Armenian marzes have new governors

The Armenian government decided to appoint 8 governors at the session today.
Ashot Simonyan was appointed as Governor of Aragatsotn marz, Garik Sargsyan – Ararat marz, Romanos Petrosyan – Kotayk, Vahe Ghulumyan – Tavush, Karen Sarukhanyan – Shirak, Ishkhan Saghatelyan – Gegharkunik, Aragats Saghatelyan – Vayots Dzor and Hrant Margaryan – Lori.
The Governors of Armavir and Syunik will continue their duties.
Prime Minister of Armenia Nikol Pashinyan noted that the appointment of the new governors took place within the frames of political agreements.
Mkhitaryan introduces interactive miniature version of himself
Captain of the Armenian national football team and midfielder of London’s Arsenal Henrikh Mkhitaryan has released an interactive miniature version of himself, otherwise known as the MickiToy.

The MickiToy stands roughly 30cm tall and features Mkhitaryan dressed in the Armenian national football kit.

The toy can speak two languages – Mkhitaryan’s mother tongue Armenian and also English.

The toy has a price tag of a little bit over 24 dollars and is already available in stores.

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