The Armenian government has spent a total of about 150 billion drams (over $300 million) since March on relief and stimulus packages for businesses and individual citizens affected by the coronavirus pandemic, according to an official.
Economy Minister Tigran Khachatryan said at a press conference on Friday that of this sum 93 billion drams (over $190 million) have been allocated through banks in the forms of loans. “We decided to focus on specific issues of each sphere and to direct funds of support for targeted solutions to emerging or existing and expected issues,” the minister said.
Earlier this week the government approved two more coronavirus aid packages targeting sectors most affected by the pandemic. Under these programs assistance will be given to the spheres of tourism and agriculture.
Khachatryan said that the government’s support for the tourism sector, which is facing problems all over the world due to the coronavirus pandemic, as well as related areas, including the hotel business and public catering, will be aimed at preserving jobs. “We are dealing with a situation where companies see their turnover reduced by more than half. On the other hand, in this situation they want to save jobs and keep workers who are part of their workforce,” the minister said.
Under this program monthly support will be provided to companies with at least three employees. Those companies that have retained at least 70 percent of their personnel during the pandemic will receive from the government a full salary of every third employee. Otherwise, the government will subsidize the salary of every fourth employee. “This is a very good message for businesses that if they are at the threshold of having retained 70 percent of their personnel they may hire new employees and receive government support for 33 percent instead of 25 percent of their payroll. So, they will be able to offset a significant part of additional financial expenditures for expanding staff or increasing salaries through government support,” Khachatryan said.
Under the other program approved by the government this week assistance will be provided to grape purchasing companies and farmers. Because of the pandemic consumption of wine and brandy has fallen, leaving wine and brandy producers with less revenue. Assistance under this program will be provided in the form of interest-free loans to farmers who sell grapes to wineries and brandy-making companies.
According to the minister, there is no cap on the money provided for pandemic relief and stimulus programs. “We have not reached a point where we can say that if this limit is exceeded we will not provide support,” he said. He said that the government will soon announce new programs of support to exporters and companies that plan to be technically reequipped.
Khachatryan does not rule out that Armenia will close the pandemic-affected economic year with about a five-percent GDP fall. Last year, Armenia’s GDP grew by 7.6 percent and its economic activity index grew by 7.8 percent. The government said the figures were unprecedented for recent years. “We hope that the results of the third and fourth quarters of this year will show some improvement over the second quarter,” the minister said.
He said that this forecast is in line with the trends of the world economy. “Leading international organizations predict a global economic decline of up to 6 percent. It is also expected that 2021 will be the main year of recovery. In other words, there is no higher global optimism until the end of this year than the indicators that I’ve mentioned,” Khachatryan said.