Armenian Prime Minister says country experiences 4.8% growth of economic activity

ArmInfo. A regular Cabinet meeting was held today, chaired by Prime Minister Hovik Abrahamyan, according to the government's press-office.

Before proceeding to the agenda, the Head of Government summarized the economic results achieved in the first half-year of 2016. "I have already had the opportunity to refer to overall economic growth in the first half of 2016. However, I believe it necessary to revisit the results and challenges. We have faced socio-economic and national security challenges this year. Coupled with the global slowdown in 
economic growth and a protracted deflationary environment, the regional shocks that appeared in 2015 and the cross-border freight transportation-related unforeseen problems compromised the prospect of accelerated economic growth.

However, we can state some progress in the first half-year of 2016: the index of economic activity grew 4.8% in January- June against the same period last year. As have already mentioned, we can see the first results of the Government's export-oriented policy. Revitalized foreign trade led to 8.9% growth in industrial production over the first 6 months of 2016. The deficit of trade balance is tending down, 
but unlike 2015 when decreased imports were behind it, export growth proved to be the main factor in the reduction of foreign trade deficit in 2016. Despite the decline in domestic consumption, economic growth has been fostered by foreign trade for a year and a half now, which ushers in a qualitatively new, export-driven economic 
growth.

These changes may lead to fundamental transformations in the economy, and we must do everything to materialize that possibility. At the same time, I feel it worth mentioning again that positive changes do not mean that no further action is needed. Unfortunately, economic growth has not yet resulted in increased well-being. We must do everything to ensure that economic growth is inclusive so that every member of society could feel changes in living standards.  To make these changes a reality, we should focus on the challenges facing our economy and neutralize them consistently and systematically. I suggest that while summarizing the first semester of 2016, the 
ministers should report back not only the achievements, but also those specific initiatives and ways of involving the public in their annual and long-term agenda, We cannot provide an efficient and competitive business environment without transparent and participatory processes, increased competitiveness and economic vitality." The Government decided to set up the EnergaImpEx CJSC, which will increase natural gas imports from the Islamic Republic of Iran, making more efficient the use of the Iran-Armenia gas pipeline. The decision provides that the Government of the Republic of Armenia shall allocate money from its reserve fund to the Ministry of Energy and Natural Resources Ministry with a view to investing in the equity capital of the company.

To increase efficiency in the operations of Her-Her HPP, the meeting 
adopted a decision referred to as "Property sales permission," which 
implies the handover to Arm Aero CJSC of those fixed assets 
registered on the balance sheet of the Vorotan hydropower stations 
cascade, which will be serviced by the same crew.

The Government passed another decision entitled "Donation of 
residential areas" to address the housing problems of long- standing 
residents of the Teachers Home in Byureghavan community of Kotayk 
Marz of Armenia. Note that the residents had applied to the State 
Property Management Department by the Government with a request to 
that effect.  Under another decision, money will be earmarked from 
the Government's reserve fund for the refurbishment of the first 
floor of the National Health Institute after S. Avdalbekyan.  In the 
meantime, in Jan-June 2016 the foreign trade turnover of Armenia 
totaled 1099.3 bln AMD ($2272.5 mln), with a 2.7% growth versus Jan- 
June 2015. Exports increased by 16.7% y-o-y to 394.2 bln AMD ($815 
mln), and imports dropped by 3.7% y-o-y to 705.1 bln AMD ($1457.5 
mln). In June 2016 alone the foreign trade turnover increased by 
4.8%, due to growth of both export and import - 9.2% and 2.3% 
respectively. As compared to June 2015, the foreign trade turnover 
declined by 7.3%, with imports dropping by 11.8% and exports growing 
by 1.2%. In Jan-June 2015 foreign trade turnover dropped by 20.6% 
(14.5% growth in June alone) because of drop of import and export by 
27.2% and 1.3% respectively (in June alone import grew by 11.8% and 
export by 19.7%). To note for comparison that in Jan- June 2014 
foreign trade turnover of Armenia experienced 1% y-o-y growth with 
the export growing by 0.8% and import by 1.1%. In June 2014 alone 
foreign trade turnover declined by 4.7% because of drop of import by 
9.8% and growth of export by 11.1%. 

In June 2016 the average AMD/USD exchange rate was 477.53 AMD/$1, and 
in Jan-June 2016 - 483.86 AMD/$1 versus 475.12 AMD/$1 in June 2015 
and 476.87 AMD/$1 in Jan-June 2015. In June 2014 the rate totaled 
410.09 AMD/$1, in Jan-June 2014-411.94AMD/$1.