Prime Minister Nikol Pashinyan visited the Central Bank to participate in the reception organized on the occasion of the upcoming New Year and Christmas.
The event was attended by President of the Republic Vahagn Khachaturyan, Deputy Prime Ministers Mher Grigoryan and Tigran Khachatryan, Chief of Staff of the Prime Minister Arayik Harutyunyan, Chairman of the Central Bank Martin Galstyan, Cabinet members, MPs, representatives of the Central Bank and financial-banking system.
Prime Minister Pashinyan made a speech in which he stated:
"Dear representatives of our banking system,
I greet everyone and I am happy to see you. I must record that the Central Bank, and the banking system in general, is obviously one of the most important institutions of our state. Since 2018, the government's policy has been as follows: we must provide proper conditions to ensure the institutional independence of the Central Bank. And we have consistently pursued this policy, which did not mean a break at all, because, in fact, representatives of the Central Bank participate in all our strategy discussions, all conceptual discussions, but at the same time, we made a decision, an obvious decision, which had been the subject of discussion in Armenia for a long time, that the institutional separation of functions should be fully ensured.
I am sure that this is also the reason why we, having gone through very severe shocks, have been able to ensure macroeconomic stability, because the Armenian government, of course, has and expresses its positions and approaches on all issues, but the government has never crossed institutional lines and relies on the institutional capacity and responsibility of the Central Bank. I think this decision has justified itself.
And, indeed, in our financial market, there were complications related to the general macroeconomic environment, but it is also due to this approach that we were able to make a precise division of labor, everyone did his job, as a result of which macroeconomic stability was ensured in the most critical period, after which we have been successfully providing high economic activity and growth for several years. And, as a matter of fact, according to the calculations of the Central Bank, more than 28 percent economic growth has been ensured in Armenia since 2018.
I want to emphasize that in general the banking system operates in an environment without political pressure. And this is also something that I think is good, it should be just like that, but on the other hand, I think it should also be recorded, because these nuances that are not noticed, are not recorded, they provide a background for the stability of macroeconomic, financial markets. And when we combine all this with the environment of high economic growth, we see that our banking system also has impressive indicators, in particular, as of November 2023, the total deposit portfolio of the banking system of Armenia registered a record-high indicator of 5 trillion 619 billion 277 million AMD. It is very important that the growth is sustainable and continuous. This indicator exceeds the October indicator of this year by almost 84 billion AMD, 1.51 percent, and exceeds the indicator of the same period of 2022 by 13.46 percent, and compared to 2018, the deposit portfolio has almost doubled, the growth is over 95 percent.
The total credit portfolio of our banking system has also registered a record-high indicator: as of November, 5 trillion 365 billion 604 million AMD, which is again 2.2 percent higher than the October index, 21.3 percent higher than the November index of last year, and compared to November 2018, more than 57 percent. I think it is important to record that the total deposit portfolio exceeds the total credit portfolio by 253 billion AMD, which is a very important guarantee of the stability of the banking system.
I would like to raise one or two more facts. As of November 30 of this year, the number of customers of the banking system was 4 million 442 thousand 950 people, which increased by 19.3 percent compared to 2022, and 65.7 percent compared to 2018. As of September 30, the total number of customer accounts of the banking system was 8 million 995 thousand 422, which in is 22 percent more than 2022, and 78 percent more than 2018.
These indicators are impressive and along with the decisions on capital increase that the Central Bank President mentioned, the opportunities for stability of our banking system has increased to a certain extent, which is a very important circumstance for increasing the potential of economic growth. The fact that the deposit portfolio is much larger than the loan portfolio also gives hope that the banking system still has some potential to contribute to at least 7 percent economic growth next year. Here, our business sector, the real sector, should focus on the quality of the programs to also generate interest in the banking system.
I want to congratulate all of us on the occasion of these indicators and also thank the people who have made an effort to get us into the zone of green indicators. And, of course, this is not the peak of our capabilities, our first task is to ensure stability and the second task is to realize the potential that exists in the economy and banking system. The government tends to promote that policy.
I also want to emphasize that we have been implementing certain social programs in recent years with the hope that the our partners from the banking system will support and actively participate. I would like to thank all the banks that responded to the social programs of the government during this period and expressed practical and moral support. This is an important partnership.
I also think that on the other hand, we see new manifestations in our economy, which we also need to promote, which are related and not related to the banking system. We see that there are certain trends of activation in the stock market. I remember that in 2018-2019 we were discussing how important branch it is in the macroeconomics, and I am glad that there is some movement here as well. Of course, banks and the banking system are still the main actors here, both in the role of issuer and buyer, but I think it is what it should be like. We have no other expectations for reviving the market, to give it a start, it is important for us that this mechanism starts working. When the work of that mechanism also becomes sufficiently reliable, I think we will see new players there.
Dear attendees,
Dear representatives of the banking system,
I thank all of you for the work done in 2023, and of course, I am sure that we are all motivated to ensure high economic growth in the Republic of Armenia in 2024 like in the pervious years. For this, of course, the effective work of all branches of government is necessary, but also the Central Bank and the banking system obviously have a very significant role on the way of solving this political task.
I thank you for this readiness and motivation, so that next year, when we gather here, the indicators of not only the banking system, but also the macroeconomic indicators of Armenia, in general, will be in the green zone and we will all feel satisfied with our work. I wish you and all your families a Merry Christmas and a Happy New Year."
