Monday, May 25 2020 15:07
Karine Melikyan

Economic activity in Armenia by May 2020 has decreased

Economic activity in Armenia by May 2020 has decreased

ArmInfo.Economic activity in Armenia, in January-April 2020 has decreased by 1.7% per annum (against 7% growth a year earlier), against the backdrop of a decline  in exports and imports by 8.1% and 11.5%, respectively. According to  preliminary data of the RA Statistical Committee, in the industry  breakdown, the industrial sector, the services sector and the energy  sector showed growth, the sectors of trade and construction were in  decline, and data on the agricultural sector are published in the  statistical report only quarterly.

So, in January-April 2020, the industrial sector slowed down y-o-y  growth from 4.5% to 4.2%, the service sector slowed down growth from  17% to stagnant 0.1%, and the energy complex increased 10 3% from  9.2% decline. The trading sector and the construction sector worsened  the y-o-y  dynamics from 9.8% and 8% growth to   8.6% and 21.9%   decline respectively. 

In April 2020, compared to April 2019, economic activity decreased by  17.2%, compared to an increase of 9.2% in April 2019 aginst April  2018. And in April 2020 alone, economic activity decreased by 13.5%,  against a decline of 0.3% in April 2019.

The industrial production price index in January-April 2020 compared  to the same period in 2019 increased by 0.1%, in April 2020 compared  with April 2019 - by 0.8%, and in April 2020 alone it decreased by  1.2%.  A year earlier, a similar dynamics was observed in the index  of industrial production prices: in January- April 2019 compared with  the same period in 2018, it grew by 0.4%, in April 2019 compared to  April 2018, it grew by 0.6%, and in April 2019 alone- a decline of  3.5%.

On a monthly basis (in April 2020), all sectors were in decline: the  construction sector - 40.6%, the retail sector - 29.4%, the services  sector - 11.2%, the industrial sector - 9.2% and the energy sector -  5, 6% Moreover, four of them are accelerating downward, as evidenced  by a comparison with last year's April dynamics. So, a year earlier,  in April 2019, growth was recorded only in the services sector - by  0.5%, and the remaining sectors lingered in decline: construction -  by 10.8%, energy complex - by 3.3%, industry - by 3% and trade - by  1.8%.

In y-o-y terms (April 2020 to April 2019), there was also a decline  in all sectors: construction - 50.9%, trade - 33.1%, services -  15.9%, industrial sector - 8.6% and energy complex - 3.3%.  A year  earlier, in April 2019 compared to April 2018, the follow areas were  growing: the services sector - 16.2%, the industrial sector - 13.2%,  trade - 9%, the energy complex - 8.9% and the construction sector -  1.8%.

According to statistical data, in January-April 2020, the trade  sector holds the leadership in absolute terms with the volume of  816.1 billion drams ($ 1.7 billion). The services sector is in the  second place- 585.4 billion drams ($ 1.210 billion), the industrial  sector in the third - 585.2 billion ($ 1.209 billion), and due to the  lack of data on the agricultural sector the construction sector  ranked fourth, - 54.03 billion drams ($ 111.7 million). The volume of  electricity generation in January-April 2020 amounted to 2670.7  million kWh, of which 587.4 million kWh in April alone.

At the same time, the foreign trade turnover of Armenia in  January-April 2020 amounted to 974.2 billion drams ($ 2015.9 million)  with an acceleration of the y-o-y decline to 10.4%. In its structure,  exports slowed down in the recession - by 8.1% to 334.6 billion drams  ($ 692.5 million) and imports - by 11.5% to 639.6 billion drams ($  1323.4 million).

In April 2020 alone, foreign trade turnover decreased by 15.3%, due  to almost the same decline in exports and imports - by 15.5% and  15.2%, respectively, and compared with April 2019, a decrease in  foreign trade turnover by 28.4% was from subsidence of exports by  30.3% and imports by 27.4%.

 A year earlier, in January-April 2019, the foreign trade turnover of  Armenia decreased by 4.2% per annum, in particular, exports - by 8.6%  and imports - by 1.9%,  in April 2019 alone the growth of foreign  trade turnover by 25.8% proceeded from an increase in exports by 21%  and imports by 28.2%, compared with April 2018, these indicators were  in growth - 15.9%, 9.9% and 18.9%, respectively.

The average settlement rate of dram in April 2020 was 488.66 dr / $  1, and in January-April 2020 - 483.90 dr / $ 1, against 484.29 dr / $  1 - in April 2019 and 486.49 dr / $ 1 - in January-April 2019  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 forecasts a 1.5% drop in GDP in Armenia  for 2020. The Government of the Republic of Armenia forecasts  a 2%  drop in GDP for 2020. The forecast of the Central Bank of the  Republic of Armenia portends a slowdown in GDP growth in 2020 to a  stagnant 0.7% (from the actual 7.6% growth in 2019).

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