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Business support incentives applied in Armenia after the change of power

In 2018, the new authorities of the Republic of Armenian announced about the start of an "economic revolution", one of the key components of which was the assessment of the efficiency and transparency of tax and customs incentives provided to businesses, the elimination of inefficient incentives and the definition of new more targeted and effective support mechanisms. What we have today? What steps have been taken by the government to achieve the mentioned goals? This analysis presents the main tax and customs incentives applied to support businesses in Armenia, the main changes done in recent years and the steps undertaken by the Government to increase efficiency and accountability of the applied incentives. The full material is available only in Armenian.

  


On the execution report of the state budget of the RA for the first quarter of 2022

The objective of the present analysis is to assess the execution of the state budget of the RA in the given period. First, we describe the general state of the economy of the RA, namely the driving forces of economic activity, the developments in individual sectors of the economy. Afterwards, we analyze the performance of government revenues and expenditures by comparing the actual and planned values of the respective indicators. We conclude the analysis by summarizing the main observations and results. Full material is only available in Armenian.

  


CAUSES AND CONSEQUENCES OF INFLATION. How much has the real standard of living of the population decreased due to accelerating inflation since the end of 2020?

In 2021 the highest rate of inflation of the past 10 years was registered, which is driven by both external and internal factors. High inflation has had significant negative socio-economic consequences, that are analysed in this study.

The paper presents the macroeconomic implications of accelerating inflation and raising interest rate of the Central Bank of Armenia (as a response to high inflation), as well as the effects of inflation on the living standards of the population.

The results show that inflation has significantly slowed down the real growth of the population's income. At the same time, the income growth of those with high living standards was significantly higher than that of the socially vulnerable population, resulting in increased income inequality. Moreover, due to the leading increase in the prices of primary consumer goods, the increase in prices was 8.5% for the poorest households and 6.1% for the richest.

In these conditions, in 2022. As a result of the Russian-Ukrainian conflict, since February 2012, world prices for energy and food have risen sharply, which will inevitably lead to an acceleration of inflation in Armenia (already noticeable in March), meaning that that the negative effects described above will go deeper in 2022. Full material is only available in Armenian.

  


What is hidden in the indicators of the Stockholm Institute (SIPRI) database related to Armenia?

In this article, we tried to figure out what the database of the arms transfer program of the Stockholm International Peace Research Institute (SIPRI) is, to what extent it reflects the real picture of the arms trade, and what interesting indicators about Armenia are hidden there. Full material is only available in Armenian.

  


Once again? “Rudderless, scattered, non-ideological” Ignorance, deceit and trickery signal new catastrophe

The article discusses the programme approaches to the Artsakh issue presented by the Government of the Republic of Armenia on April 13-14, during the discussion of the 2021 budget execution at the sitting of the National Assembly. It addresses the references made with regard to the conflict settlement documents, the issues related to Artsakh's self-determination and Azerbaijan's territorial integrity, statements made on behalf of the international community, issues related to the settlement of the conflict with the consent of Azerbaijan, the aims and objectives of the lawsuit filed by Armenia in the International Court of Justice, the possibility of concluding a "peace treaty" between Armenia and Azerbaijan and its consequences, the principles put forward by Azerbaijan in this regard, as well as the self-assessment of the activities of the RA Prime Minister. The analysis of the views on these issues and the comparison of the results show that regardless of a non-specific style of programme approaches, the focused development of key ideas and the subsequent use of destructive approaches suggest that, in terms of content, a comprehensive position was presented on the issues vital for the country, which can be unconditionally considered as programmatic. It is argued that the total use of systematic combinations of lies, tricks and deceit is fraught with serious consequences. Moreover, the danger of the presented steps of the program and further developments increases significantly amid the decisive stage of the struggle to establish a new world order. Under the current extremely difficult and dangerous situation created for Armenia and Artsakh, the mission of the Armenian opposition needs to be reformulated. It is necessary to make serious inquiries into the mistakes made in the previous two stages of the struggle, to get rid of promises and exhortations conditioned by external impulses, as well as of artificial underestimation of internal factors ("the people are not ready yet", etc.). The ways and means of political activity must be radically reconsidered. The will to exclude the expression of fragmented interests, to exclude the repetition of mistakes in the whole period following the re-establishment of independence, as well as the determination to build free and fair Republic of Armenia and Republic of Artsakh capable to defend itself and its citizens must be clearly stated. Otherwise, the opposition will become the same accomplice of past and future disasters as the current government is with its words. Full material is only available in Armenian.

  


The social-economic developments in the economy of the RA for January-March 2022

In the present analysis, given the data published by the Statistical Committee of the RA, we study the recent social-economic developments in the economy of the RA. In particular, we consider the cumulative indicator of economic activity of the given month, its sectoral distribution, as well as the dynamics of individual sectors of the economy. We also analyze economic developments in the foreign trade, labour market and fiscal system of the RA. In addition, some aspects of the financial system (inflation, deposits and loans), as well as the behaviour of the exchange rate, are touched upon. Full material is only available in Armenian.

  


ON THE THRESHOLD OF A NEW CRISIS. The possible impact of sanctions against Russia in 2022 on the Armenian economy

The objective of this research is to assess the effects of new economic sanctions currently being imposed on the Russian Federation on Armenian economy. To reach this objective the effects of sanctions imposed on the Russian economy since 2014 and its transmission into Armenian economy were studied, as well as historical economic losses of both countries associated with these sanctions were estimated through econometric tools. Also the changes in the resilience of Armenian economy and economic dependence from Russian economy since 2014 were revealed.

On the basis of these studies, by applying multivariate econometric models (specifically Structural Vector Autoregression/SVAR/ model) and a general equilibrium model (Global Integrated Monetary and Fiscal/GIMF/ DSGE model), three scenarios were designed to capture the effects of new sanctions (imposed since February 2022) on Armenian economy: the “baseline” scenario (the Russian economy declines by 11% in 2022), the “optimistic” scenario (the Russian economy declines by 7%), and the “pessimistic” scenario (the Russian economy declines by 15%).

The scenarios suggest a range of possible developments in the RA economy, starting from growth deceleration to 1.3% and ending with a 3% economic decline. They also show that the RA economy may lose some of its economic potential in the medium-term: the losses of real GDP would reach an amount estimated from 5% to 12% in 2026 compared to pre-shock forecasts.

Given the huge uncertainties around the developments associated with the shock, possible upside and downside risks, as well as opportunities for Armenian economy were also revealed. Full material is only available in Armenian.

  


A new challenge to the independence of the judiciary: What аre the observations of the Venice Commission and how does the executive proceed?

The Ministry of Justice has initiated another “reform” that puts the independence of the judiciary under further threat. Initially, the Ministry attempted to carry out the “reform” in an easy way, only defining a new incompatibility requirement for judges, which should serve as a ground for immediate termination of the powers of the judge. Meanwhile, after receiving a critical opinion from the Venice Commission, the Ministry was obliged to revise the draft proposal. However, the Ministry of Justice ignored core remarks of the Venice Commission relating to the impermissibility of giving retroactive effect to new grounds of termination of the powers of a judge. As a result, the Ministry created the illusion that the amended draft law is in line with the observations of the Venice Commission, while the reality is entirely different. Full material is only available in Armenian.

  


The social-economic developments in the economy of the RA for January-February 2022

In the present analysis, given the data published by the Statistical Committee of the RA, we study the recent social-economic developments in the economy of the RA. In particular, we consider the cumulative indicator of economic activity of the given month, its sectoral distribution, as well as the dynamics of individual sectors of the economy. We also analyze economic developments in the foreign trade, labour market and fiscal system of the RA. In addition, some aspects of the financial system (inflation, deposits and loans), as well as the behaviour of the exchange rate, are touched upon. Full material is only available in Armenian.

  


Reference on the execution of the budget of the city of Yerevan (2021)

The budget execution report of Yerevan represents the main results – achievements and failures - of activities of the city council in the given period. It shows by how much the actual revenue collection deviates from the planned level. Additionally, the report demonstrates whether the expenditures were made in accordance with the prespecified plan. The budget execution report of Yerevan also characterizes the structure of actual revenues and expenditures. The goal of the present analysis is to study the foregoing report and to make necessary conclusions. Full material is only available in Armenian.

  


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