Wednesday | 24 June, 2009

Financial crisis in Armenia | EV research center’s assessment

The global financial crisis has affected 70% of Armenians, states the Economy and Values Research Center, which recently conducted a study of the impact of the financial crisis in Armenia. The study included a survey of 1000 households in all the regions of Armenia and a survey of 60 large- and medium-sized businesses.

The financial crisis has had an impact across Armenia. The report indicates an 11-25% decrease in income throughout the country. The largest decrease in income is observed in Yerevan, where 40% of the respondents report that their income has dropped by 26-50%.

The crisis has also impacted consumer preferences. Thus, 80% of households will start purchasing cheaper goods. Additionally, 30% of households plan to cut or postpone their spending on communications, durable goods and vacation.

The impact of the crisis on the business sector is significant. According to the study 90% of the businesses surveyed reported that they have been affected by the crisis, and only 5% think that it will not influence them. Moreover, businesses are pessimistic in their predictions, with 80% of the surveyed businesses thinking that the situation will deteriorate further in 2009.

Strategies to overcome the crisis likely mirror those of businesses in other countries. The majority of the businesses surveyed plan to cut administrative expenses and postpone investments. Forty percent, particularly small- and medium-sized businesses, plan to downsize.

The results of the study are available here (in Armenian only).