Azernews.Az

By Mushvig Mehdiyev

Business owners in Yerevan are faced with yet another threat. A sharp decrease in sales has forced many businesses to close their doors.

According to recent data, Armenian nation’s buying power has hit an all-time low over the past years, putting the private sector under aggravated pressure.

The ongoing economic crisis has but completely destroyed the business sector.

Numerous stores, including well-established businesses in Yerevan had to close, unable to cover their expenses anymore.

Correspondent of local media outlet, FactInfo revealed that Yerevan was not the only city in Armenia to feel the strain. Across Armenia businesses have quite literally dropped like flies, suffocated by financial difficulties.

Many shop windows are going under administration, featuring the much dreaded "liquidation prices" banner across their stores. Desperate to recuperate the cost of their stock business owners have been selling at cost in the hope to spark some interest among customers.

Many shops owners have linked their decision to close their businesses with the shortfall of buyers amid such tough economic times.

The owner of one of Yerevan's clothing stores, Tigran Meca said he had great hopes to establish a firm business when he opened the shop a few months ago.

"But my hopes have been dashed. Even though we sold everything at a fraction of their original price, we failed in reviving the business," he said.

A sharp devaluation of the national currency, the dram, has had devastating effects on Armenia's economy. Added to that a significant decrease in the amount of remittances transferred from overseas and stagnation in many industry fields created a perfect economic storm -- high unemployment, inflation, drop in buying power and so on.

The dram has lost almost 20 percent of its value against the dollar and euro , causing a real turmoil in exchange markets. The devaluation of the dram translated on the ground into a sharp increase in prices.

The latest World Bank data once again highlighted the fact that remittances sent from overseas are the "beating heart" of Armenia's ill economy. In a very recent WB report, Armenia found itself among the top ten countries which have been classified as most dependent on remittances in the world.

The overall share of migrant money in Armenia's GDP has been calculated at 21 percent, or $2 billion out of a total of $10 billion. And since most remittances are issued from Russia, Armenia has found itself cornered. With Russia left reeling from EU and U.S. sanctions, all countries dependent on Russia's economy have left the pinch.

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