Armenia's Economic Pulse

[Mher]

Re: Armenia's Economic Pulse

Traders Resume Protests Against New Tax Law
Narine Ghalechian

Հրապարակված է՝ 26.01.2015

Hundreds of small-scale traders resumed their demonstrations in Yerevan on Monday, demanding that the government again delay the enforcement of new taxation rules which they believe spell trouble for their businesses.

At issue are recent changes in an Armenian law on turnover tax, which is levied from businesses with annual sales of up to 58 million drams ($125,000). The latter pay no other taxes.

The amended law, which took effect on October 1, lowered from 3.5 percent to 1 percent the turnover tax rate. However, it obligated the small business owners to provide tax authorities with documentary evidence of their wholesale purchases made from larger firms or face heavy fines.

The traders say that they cannot comply with this new requirements meant to complicate tax evasion because their suppliers usually refuse to issue them with receipts and invoices. Hundreds of them held a series of demonstrations outside Prime Minister Hovik Abrahamian’s office in September and October. The protests forced the government to effectively freeze until February 1 the controversial measure criticized by the Armenian opposition.

With only one week remaining until the end of that reprieve, several hundred traders from Yerevan and other parts of the country again gathered outside the main government building in the Armenian capital. They demanded that the government suspend the law in question or repeal it altogether.

“I want to say on behalf of everyone that none of us agrees with the law,” said one woman operating a small shop in a Yerevan shopping mall.

“We won’t be able to show tax authorities contracts on purchases of goods,” said another, male protester.

The angry crowd also demanded that Abrahamian come out of the building and talk to them. An official from his staff, Aleksandr Ghazarian, said the prime minister is only ready to discuss the matter with up to a dozen representatives of the traders mostly selling goods in retail markets.

The protesters rejected the offer, saying that Abrahamian must address all of them. They pledged to again rally on the same spot on Tuesday.

http://www.azatutyun.am/content/article/26814571.html

[Mher]

Re: Armenia's Economic Pulse

The price of copper is down by over 20% in the past 4 months
mining exports, specially copper, make up 50% of Armenia's exported goods

http://www.nasdaq.com/markets/copper.aspx?timeframe=1y

[Mher]

Re: Armenia's Economic Pulse

Fitch Downgrades Armenia to 'B+'; Outlook Stable

(The following statement was released by the rating agency) LONDON, January 30 (Fitch) Fitch Ratings has downgraded Armenia's Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'B+' from 'BB-'. The Outlook is Stable. The issue ratings on Armenia's senior unsecured foreign and local currency bonds have also been downgraded to 'B+' from 'BB-'. The Country Ceiling has been revised to 'BB-' from 'BB' and the Short-term foreign currency IDR affirmed at 'B'. KEY RATING DRIVERS The downgrade of Armenia's Long-term IDRs reflects the following key rating drivers and their relative weights: High Armenia is highly exposed to the severe economic downturn in Russia (BBB-/Negative), which will weigh heavily on Armenia's balance of payment and growth prospects. The economy is expected to fall into a mild recession in 2015, with risks tilted to the downside given the worsening economic situation in Russia and likely negative impact on external imbalances and further depreciation pressures. The current account deficit is expected to widen again in 2015 as a result of a sharp reduction in both remittances inflows and export demand from Russia. Remittances amount to about 15% of GDP and fell by about 30% during the last months of 2014 as 90% of the total come from Russia. The impact of the fall in oil prices on imports will be largely outweighed by the strengthening of the dollar and a decline in international prices of key Armenian exports. Mining exports, especially copper, account for about half of Armenia's goods exports. Foreign currency reserves at the Central Bank of Armenia (CBA) are expected to continue their downward trend from a relatively low level of USD1.49bn in December 2014. The decline in reserves is primarily due to lower current account receipts and FDI inflows, but also, to a lesser extent, to market intervention by the CBA to limit the depreciation of the Armenian dram. Foreign currency reserves are expected to represent about three months of current account payments in 2015-16, compared with more than four months on average in 2010-13. Medium Public debt dynamics are highly sensitive to depreciation risks, as about 80% of public debt is foreign currency denominated. The debt-to-GDP ratio rose to nearly 50% in 2014, primarily as a result of exchange rate depreciation. The ratio is expected to remain broadly stable in the coming years but this assumes a stabilisation of the exchange rate. Risks are to the downside. Fiscal policy has been prudent since 2010, and we expect the government to maintain the fiscal deficit below 3% of GDP. Armenia is highly reliant on Russian gas supplies, remittances and military support, leaving it particularly vulnerable to economic and policy changes in Russia. Armenia's accession to the Eurasian Economic Union in January 2015 will further deepen its economic, financial, political and institutional ties with Russia. Despite recent events in Gyumri, we expect the close bilateral relationship to remain and to continue weighing on Armenia's economic and institutional setting. The financial sector is highly dollarised and will therefore be negatively impacted by the depreciation of the Armenian dram. The depreciation and economic downturn are likely to bring about an increase in non-performing loans and to dent the currently robust capital adequacy ratios. The CBA has increased the minimum capital requirements for banks, which could trigger some consolidation in the sector. Armenia's 'B+' IDRs also reflect the following key rating drivers: The CBA raised its refinancing rate twice in recent months to 9.5%. The Armenian dram depreciated by 17% in 2014. Inflation is expected to pick up to 6.5% in 2015 (CBA target range: 2.5%-5.5%) as a result of higher import prices, although relatively moderate pass-through effects should contain the impact. Armenia benefits from an IMF Extended Fund Facility for 2014-17 worth USD119.1m, which acts as a policy anchor. Armenia is expected to continue fulfilling the performance criteria and to continue to enjoy support from major international financial institutions, primarily to finance large infrastructure projects. Armenia's business environment compares favourably with rating peers, as illustrated by the World Bank's ease of doing business indicators. Armenia's geopolitical environment is a constraint on the rating. The latent conflict with Azerbaijan over the disputed Nagorno-Karabakh region entails the risk of escalating into a full-scale conflict. No resolution is expected in the short term. RATING SENSITIVITIES The main risk factors that, individually or collectively, could trigger negative rating action are: - Bigger than expected negative spill-over effects from economic and political developments in Russia affecting GDP growth, external receipts and the exchange rate. - A continuation of the weakening of external reserves, leading to a deterioration in solvency and liquidity ratios. - Material fiscal slippage leading to a significant rise in the debt/GDP ratio. The main risk factors that, individually or collectively, could trigger positive rating action are: - Reduced risks emanating from Russia leading to an easing of external pressures. - A decline in the debt-to-GDP ratio closer to the peer median. - An easing of the tensions with Azerbaijan and an improvement in relations with other neighbouring countries.

http://www.reuters.com/article/2015/01/30/idUSFit91243420150130

[Mher]

Re: Armenia's Economic Pulse

Georgian Lari has lost 10% in the past 10 after stabilizing around new years.

http://www.xe.com/currencycharts/?from=USD&to=GEL&view=1Y

Its year to year loss has caught up to the Dram now


Georgian central bank to tighten monetary policy from next week

TBILISI Fri Jan 30, 2015 4:02am EST


Jan 30 (Reuters) - Georgia's central bank plans to tighten monetary policy from next week, the bank's chief said on Friday, in an effort to maintain financial stability after a sharp fall in the value of the country's lari currency.

"We've decided to tighten monetary policy from next week by using all the mechanisms that we have," Georgy Kadagidze, the governor of the National Bank, told reporters.

Kadagidze said the central bank was also likely to revise down its forecast for economic growth for this year of 5 percent.

"Taking into account the challenges in the economy and analysing the current situation, we should start to revise down the 5 percent economic growth forecast," Kadagidze said. (Reporting by Margarita Antidze; Writing by Alexander Winning, Editing by Timothy Heritage)

[Mher]

Re: Armenia's Economic Pulse

First Carrefour to open in Yerevan, most probably, in early March - ambassador

YEREVAN, February 4. /ARKA/. The first Carrefour hypermarket in Armenia will open in Yerevan, most probably, in the beginning of March, French ambassador to Armenia jean-Francois Charpentier told a press conference on Wednesday.

Preparations for the opening will be completed soon, he said.

Charpentier also said the management of the hypermarket will rather prefer working with local producers. Specific products, certain brands of wines and cheese in particular, will be also available in the shop, he said.

The preliminary agreement between Yerevan Mall trade center and Carrefour was signed in Yerevan on May 13, in the presence of the presidents Serzh Sargsyan and Francois Hollande.

Carrefour SA is a French retail trade company and operator of Carrefour, the world’s second biggest chain of hypermarket after Wal-Mart.

The hypermarket will be opened in the territory of Yerevan Mall that occupies premises of 66,000 square meters, of which 10,000 square meters are built up in accordance with Carrefour standards.

http://arka.am/en/news/business/first_carrefour_to_open_in_yerevan_most_probably_in_early_march_ambassador/#sthash.zAm8Lnux.dpuf

[Haykakan]

Re: Armenia's Economic Pulse

IRAN, EURASIAN ECONOMIC UNION PLAN TO SIGN CUSTOMS TRADE AGREEMENT: ENVOY

11:17, 05 Feb 2015
Siranush Ghazanchyan

Iran plans to sign a memorandum of understanding with the Eurasian
Economic Union (EEU) in 2015 to facilitate mutual customs trade,
according to Iranian Ambassador to Russia Mehdi Sanaei.

Sanaei said that the Iranian Ministry of Industry, Mining and Trade
has been negotiating with the EEU to reduce customs duties between Iran
and the EEU member states, the IRNA news agency reported on Wednesday.

"I think that in 2015 we need to work on this so that Iran has concrete
economic contracts with the EEU... Iran plans to use this opportunity
for its exports to Russia and other [countries]," Sanaei told RIA
Novosti in an interview.

"It's possible that some sort of contract or memorandum on mutual
understanding needs to be signed," the ambassador added.

He said that currently there are high tariffs on Iranian exports
to Russia.

http://www.armradio.am/en/2015/02/05/iran-eurasian-economic-union-plan-to-sign-customs-trade-agreement-envoy/

[Haykakan]

Re: Armenia's Economic Pulse

HAYKAKAN ZHAMANAK: ARMENIA NEGOTIATING PURCHASE OF RUSSIAN GAS IN ROUBLES

09:15 * 05.02.15

The Armenian Government is said to be seeking Russia's consent over
carrying out natural gas purchase in the Russian Rouble.

The paper notes that Armenia now annually pays $350-$450 million to
the country for the fuel's supply.

Citing its sources, the paper says that the issue will be on the agenda
of upcoming talks between the Armenian and Russian prime ministers
(a delegation led by Premier Hovik Abrahamyan reportedly leaving
for Moscow on Thursday). The paper notes that there is little if
any hope that Russia will agree to carry out the entire transaction
in Roubles. The problem, according to the paper, is that Russia
annually pays about $200 million to Armenia for its 102nd military
base stationed in the second largest city of Gyumri.

In a deal which the sides will most likely reach, the Russian
Government will agree to transfer the 200 million to Gazprom, says
the paper, while Gazprom Armenia will pay its 200 million Dollars
for the 102nd military base to the Armenian Government

"Thus, Armenia will pay only 150-200 million Dollars in a foreign
currency for gas, the remaining fee to be covered in Russian Roubles.

This can essentially reduce the currency market tension observed at
peak moments of making the payment for gas," comments the paper.

http://www.tert.am/en/news/2015/02/05/hzh1/1580007

[Mher]

Re: Armenia's Economic Pulse

IRAN, EURASIAN ECONOMIC UNION PLAN TO SIGN CUSTOMS TRADE AGREEMENT: ENVOY

Great to hear
The main reason, despite the fundamental institutional problems that exist in the EEU, why I thought the EEU could be a success for Armenia.

[londontsi]

Re: Armenia's Economic Pulse

Activist Artak Khachatryan abducted

http://en.a1plus.am/1205588.html

Shortly before it became known that unknown people had abducted activist Artak Khachatryan from Tolstoy Street. He actively took part in the rallies against “Turnover tax” law.

Artak Khachatryan has close ties with BHK. His personal photos on Facebook prove it.

BHK deputy Vahan Babayan confirmed the news.

Details- later

[londontsi]

Re: Armenia's Economic Pulse

Artak Khachatryan found beaten (video)

http://en.a1plus.am/1205612.html

It was announced near the Government building that “Kasetsum” movement member Artak Khachatryan was found beaten near his house. “ Some people had just left him there,”- said Artak’s brother.

Artyom Khachatryan considered his brother’s abduction a cowardly act, “Why don’t you open your faces? I haven’t seen any act more despicable and more horrible. Such acts happened in 1990s when there was no government, but now? Let one explain why a person was abducted. Is there any explanation? No. I am a free, independent and brave citizen of the RA, let them take me, where must they take? I consider the institution, which isn’t able to reveal the crime in an operative way to be criminal.”