Monday, April 27 2020 15:11
Karine Melikyan

In Q1, 2020 growth of economic activity in Armenia slowed down from  6.5% to 4%

In Q1, 2020 growth of economic activity in Armenia slowed down from  6.5% to 4%

ArmInfo.In Armenia, economic activity in January-March 2020 compared to January-March 2019 slowed to 4%.

According to preliminary data of the RA Statistical Committee,  the energy sector - 14.8% and the industrial sector - 8.7%, and to a  lesser extent the services sector - 5.5% and the trading sector -  0.2%, acted as growth drivers, while the agricultural sector  demonstrated 4,5% growth after a decline, and this time the  construction sector turned in the direction of decline - 9.4%.  Compared to last year's pace, growth accelerated in the industrial  sector, growth slowed down in the services and trade sectors, the  agricultural sector and energy sector registered growth out of  recession, and a turn from growth to decline in the construction  sector was observed. 

A year earlier, in January-March 2019 compared to January-March 2018,  economic activity slowed down from 10.6% to 6.5%, amid a decline in  exports by 8.6% and imports by 3.1%. Growth was then recorded to a  greater extent in the services sector - by 17.3%, the construction  sector - by 10.8%, the trade sector - by 10.1%, amid a modest growth  in the industrial sector by 2%, and a decline in the agricultural  sector and energy sector by 0.2% and 14% respectively. 

Meanwhile, in March 2020, compared with February (on a monthly  basis), economic activity decreased by 0.2% (against a 14.8% growth  in March 2019). Moreover, in addition to the construction sector,  which showed an increase of 14%, all other industries have declined:  the energy sector - 15.4%, the services sector - 5.8%, the trade  sector - 3.5% and the industrial sector - 2%, while agricultural  sector statistics for the month is not indicated. A year earlier, in  March 2019 compared with February, all sectors demonstrated growth:  the construction sector - 61.1%, the industrial sector - 16.1%, the  services sector - 10.8%, the energy sector - 9.3%, the trade sector -  6, 7%, and data for the month are not available for the agricultural  sector.

In y-o-y terms (March 2020 versus March 2019), economic activity  unfolded from a 6.2% increase to a 4.9% decline. This is due to the  deterioration of dynamics in all sectors, and a particularly  impressive decline was recorded in the construction sector - by  26.2%, followed by a downward trend: trade - 9.9%, services - 4.8%,  industrial sector - 1, 9%, the energy complex - 1%, and data on the  agricultural sector are not given in the statistical report. A year  earlier, in March 2019 versus March 2018, these industries were  growing with a tendency to slow down: the service sector - from 18.8%  to 16.9%, the retail sector - from 6.3% to 5.3%, the industrial  sector - from 8.2% to 2.2%, the energy complex - from 6.9% to 3.4%,  the construction sector - from 23.2% to 0.5%.  According to   statistical data, in January-March 2020, the trading sector with the  volume of 657.5 billion AMD ($ 1.4 billion) holds leadership in  absolute terms.  Services sector is on the second place in terms of  volume -451.6 billion AMD ($ 936.3 million), the third is the  industrial sector - 450.4 billion AMD ($ 933.8 million), the fourth  is the agricultural sector - 73.6 billion AMD ($ 152.6 million), and  the fifth is the construction sector - 43.9 billion AMD ($ 91  million). The volume of electricity generation in January-March 2020  amounted to 2083.3 million kWh, of which in March alone - 622 million  kWh. The industrial production price index decreased in January-March  2020 compared to the same period last year by 0.1%, In March alone it  decreased by 0.4%, and compared with March 2019 it decreased by 1.7%,  while a year earlier, the dynamics was as follows: in January-March  2019 - growth of 0.3% y / y, in March - growth of 0.7%, compared with  March 2018 - growth of 3%. 

At the same time, the foreign trade turnover of Armenia in  January-March 2020 amounted to 753.9 billion AMD ($ 1565.1 million)  with a y-o-y decline of 4%. In its structure, the volume of exports  underwent a y-o-y growth of 0.2% to 262.4 billion AMD ($ 544.9  million), while imports - a decline of 6.2% to 491.5 billion AMD ($  1020.2 million). 

In March 2020 alone, foreign trade turnover decreased by 7.9% due to  a decline in exports by 13.3% and imports by 4.9%. In March 2020  versus March 2019, the decline in exports by 17.4% and imports by  15.3%, reduced foreign trade by 16%.  A year earlier, in  January-March 2019, foreign trade turnover experienced a y-o-y  decline of 5% due to a decline in imports by 3.1% and exports by  8.6%. In March 2019, imports grew by 8.8% and exports by 7.5% ensured  an increase in foreign trade turnover by 8.4%, compared with March  2018, a decrease in foreign trade turnover by 0.4% was triggered by a  decline in exports by 2.5% with an increase in imports by 0.8%.

The average settlement rate of AMD in March 2020 was 489.01 AMD / $  1, and in January-March - 482.32 AMD / $ 1, against 487.48 AMD / $ 1  in March 2019 and 487.23 AMD / $ 1- in January-March 2019. It should  be noted that the RA government predicts a 2% drop in GDP for 2020.  According to WB forecasts, Armenia's GDP growth in 2020 will amount  to 1.7% (according to the baseline scenario), but the likelihood of a  recession is not excluded.  In terms of Armenia's foreign trade, the  WB forecasts for 2020 a decline in exports and imports by 1.5% and  2.6%, respectively.  The IMF predicts a 1.5% drop in GDP in Armenia  for 2020. The forecast of the Central Bank of the Republic of Armenia  envisages a slowdown in GDP growth in 2020 to a stagnant 0.7% (from  the actual 7.6% growth in 2019). To recall, in Armenia, as part of  measures to prevent the spread of the coronavirus pandemic, a state  of emergency was introduced from March 16, which will last until May  14 inclusive. In this regard, a temporary ban was imposed on some  activities in the first month of emergency, which was partially  lifted in the second half of April. 

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