Azernews.Az

By Sara Rajabova

Forecasts by international financial institutions show that Armenian officials underestimate the dire economic situation of the country.

The Armenian government is not only incapable of pulling the country out from a lasting economic crisis, but the government also triggers new problems itself by making life for the citizens more difficult.

The World Bank in its latest study does not rule out a shortfall of electricity in Armenia in near future.

World Bank experts believe that what is happening in Armenia is "considered energy poverty in the international practice," Armenian media reported.

The Bank experts said after ten years the energy produced in Armenia will be less than half of demand if no new power plants are built in the country in the coming years.

"In the near future Armenia will need additional production volumes in order to avoid in the long run shortages of supplied electricity," World Bank expert on energy issues Artur Kochnakian said.

The World Bank also noted that as a result of the continuing rise in prices for electricity, residents will be forced to spend an even greater portion of their incomes to cover electrical costs.

"The analysis shows that an average household already spends 10 percent of their income on energy, not counting the last increase, which will come into force on 1 August. It is considered in the international practice as energy poverty, that is, the household cannot afford to use even the minimum required amount of electricity," Kochnakian said.

Economists have warned that by 2017, electricity prices will rise again when the Metsamor nuclear power plant will be suspended for six months for maintenance.

This comes as the commission on regulation of public services in Armenia in its June 18 meeting approved a decision on increasing electricity tariffs. According to this decision, consumers are required to pay 48.78 drams instead of the current 41.85 per 1 kWh per day starting August 1.

Earlier, the decision to increase electricity tariffs had spurred strong public reactions throughout the country

In late May, Armenians protested against the increase in electricity prices in 15 cities across the country. Participants in Yerevan threatened authorities with more protests should electricity tariffs go up.

Following the approval of the decision, Armenian media reported on a march initiated by the activist group "No to plunder".

“We will go around all the administrative regions to tell people that yesterday's decision will not stop us. They are trying to create the impression that after the price increase we cannot do anything. But we will show that this solution can be canceled,” the activists exclaimed.

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Sara Rajabova is AzerNews’ staff journalist, follow her on Twitter: @SaraRajabova

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