ArmInfo. The indicator of economic activity in Armenia increased in July 2019 by 8.1% y-o-y (3.4% y-o-y a month earlier). The dynamics of the indicator could be positively affected by agriculture, in which in the second half of 2019 production growth is forecasted against the background of a low comparison base.
In other main sectors of the economy, an improvement was also recorded in July 2019 - industrial production increased by 16.1% y-o-y, retail and wholesale trade turnover increased by 9.1% y-o-y, construction volume by 4.1% y-o-y (12.8% y-o- y, 6.7% y-o- y and 0.6% y -o-y a month earlier, respectively). This is stated in the monthly report of the Eurasian Development Bank prepared by the EDB Economic Analysis Division.
According to the analyst of the department, Konstantin Fedorov, in general, in the 3rd quarter of 2019, the economy of the Republic of Armenia can demonstrate high growth rates against the background of the significant contribution of the agricultural sector. Budget performance and the dynamics of public debt for the first half of 2019 indicate an improvement in the financial situation of the republic. The state budget surplus in January - June 2019 amounted to 121.9 billion drams (in the same period of the previous year - a deficit of 3.8 billion drams). Revenues in the reporting period amounted to 759 billion drams, an increase of 25.1% y-o-y. According to EDB analysts, the growth factors of the indicator were both the expansion of economic activity and the measures of the authorities aimed at improving tax collection. The state debt of Armenia decreased at the end of June 2019 to 3308 billion drams from 3349 billion drams at the end of 2018 due to the reduction of external liabilities. According to the results of July 2019, the trade deficit increased due to an increase in individual import items. Deliveries of mineral products to Armenia, most of which are natural gas and oil products, amounted to $ 78.7 million (+ 28.4% y-o-y), and vehicles - $ 61.3 million (+97, 3% y-o-y). In the second half of 2019, an improvement in the external balance of the republic can be expected amid falling prices on energy markets. Inflation fell to 0.6% y-o-y in August 2019 from 1.7% y-o-y a month earlier. The main factor in the slowdown was a drop in food prices by 0.3% y-o- y against the backdrop of growing agricultural production and a high comparison base. It can be expected that, as the effect on inflation of volatile food prices is exhausted, its dynamics will recover under the influence of growing domestic demand and return to the target range of the Central Bank of the Republic of Armenia (2.5-5.5%). The forecast of the Central Bank of the Republic of Armenia suggests that this will happen during 2020.