Source: Leo Koolhoven/flickr
Economic activity fell by nearly 50% in Armenia this January, compared to the previous month, local media reported on Wednesday. The government claims that all sectors of the economy contributed to the country’s 3.1% GDP growth in 2015, but the population’s purchasing power has been falling.
The average monthly salary fell by 19.5% in nominal terms in January 2016 compared to December 2015. This came amidst inflation of 3.7% last year, which would not be so bad had wages remained constant. Concerns are growing over the depreciation of Armenia’s currency, the dram, after about a year of stability. The worst-case scenario would be the dram returning to its volatile past, like when it lost about 20% of its value within several days in December 2014. Another depreciation like that would wreak havoc on the import-dependent country.
One way forward is to try to attract more foreign investment to diversify the economy…
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