Imported Cars Will Wear Out and Leave Within 1-2 Years: The Government Has No Role Here, Economist Says

In 2019, we witnessed a significant increase in private transfers, around 10 percent, but the outflow was even greater. This was stated today during a press meeting by former Central Bank president and economist Bagrat Asatryan, who added that one of the major funding sources for the high volume of car imports in 2019 was indeed this flow.

“In other words, the population invested more here than the resources attracted from banks. This is a typical situation in Armenia; if someone opens a pharmacy, suddenly the whole street is filled with pharmacies. Similarly, we were enthusiastic to decide that car prices would rise significantly starting January 1, coinciding with increased taxes, forgetting that the law of supply and demand has not been abolished. There is a problem here, but it’s not significant, and the authorities have no action to take in this case,” the economist stated, adding that it would be wise for those who purchased cars on credit to sell them quickly to avoid falling into greater debt.

“This is real life; we live in a market economy. It creates risks, and the risk is the chance of obtaining additional resources or not. We need to educate society regarding this issue. The scale of the problem is not that large. It is clear that the volumes of cars imported this year will sharply decline. Within 1-2 years, these will wear out and leave,” he concluded.