ArmInfo.In Armenia, economic activity in January-May 2020 decreased by 3.9% per annum amid a deepening decline in exports and imports. In May this year versus May 2019, economic activity decreased by 12.8%, while in May 2020 alone, it demonstrated an increase of 13.3%. A year earlier, during the same periods, economic activity recorded growth: in January-May 2019, versus the same period of 2018, by 7.3%, the same indicator was recorded in May 2019 compared to May 2018, and in May alone- by 8.4%.
According to preliminary data of the Statistical Committee of the Republic of Armenia, the decline in economic activity in January-May 2020 was largely determined by the construction sector, trade sector and services sector - by 23.4%, 10.8% and 4.2%, respectively. However, the growth of 2.4% and 8.3%, provided by the industrial sector and the energy complex, respectively, restrained economic activity from a larger decline. A year earlier, in January-May 2019, the following sectors demonstrated growth: the services sector - 16.5%, trade - 9.4%, construction - 6.1%, the industrial sector - 5.6%, and the energy complex was in decline by 7.4%. Starting from 2019, only quarterly and annual data on the agricultural sector are published.
The industrial production price index increased in January-May 2020 compared to the same period in 2019 by 0.3%, in May 2020 compared with May 2019 - by 1.1%, and in May 2020 alone it decreased by 0.3%. A year earlier, during the same periods, the same dynamics were recorded, but the indicators were slightly higher: the industrial production price index increased by 0.5% in January-May 2019 compared to the same period in 2018, and by 1.2% in May 2019 compared to May 2018, and in May 2019 alone decreased by 0.7%.
In y-o-y terms (in May 2020), the construction sector gave a decisive impetus to the growth of economic activity with an increase in volume of 3.1 times (against an increase of 43% in May 2019), after which trade is followed by growth rates - by 33.3% ( against growth by 9.2% in May 2019), the industrial sector - by 11.9% (against growth by 5.9% in May 2019), and the service sector - by 0.8% (against growth by 5.1% in May 2019). The energy complex lingered in recession, with a slowdown to 2% from 5.1% a year earlier.
In y-o-y terms (May 2020 versus May 2019), the decline in economic activity was observed in all sectors: construction - 27%, services - 19.4%, retail sector - 18.4%, industrial sector - 3.9%, energy complex - 0, 1%. A year earlier, in May 2019 versus May 2018, the services sector - 14.8% and the industrial sector - 10.2% were the growth drivers, against which too modest upward dynamics was registered by trade - 4.9%, the construction sector - 2% and the energy complex -1%.
According to statistical data, in January-May 2020, the trading sector with the volume of 1.03 trillion AMD ($ 2.1 billion) holds leadership in absolute terms. The industrial sector moved up to the second position - 735.6 billion AMD ($ 1.52 billion), having replaced the services sector to the third place - 718.2 billion AMD ($ 1.48 billion). Agriculture was traditionally in the fourth position, but due to lack of data, the construction sector turned out to be in this place - 77.5 billion AMD ($ 160.1 million). The volume of electricity generation in January-May 2020 amounted to 3246.1 million kWh, of which in May alone - 575.4 million kWh.
At the same time, the foreign trade turnover of Armenia in January-May 2020 amounted to 1227.6 billion AMD ($ 2539.2 million) with a y-o-y decline of 11.2%. In its structure, the export volume decreased by 8.1% in y-o-y terms to 428.5 billion AMD ($ 886.2 million), and imports - by 12.8% to 799.1 billion AMD ($ 1653.0 million). In May 2020 alone, foreign trade turnover increased by 13% due to an increase in exports by 30.7% with an increase in imports of 4.3%, and compared to May 2019, a decrease in foreign trade turnover by 17.3% was largely triggered by a decline in imports by 21.8% rather than by exports - by 8.7%. A year earlier, in January-May 2019, foreign trade turnover decreased by 2.6% per annum due to a decline in imports by 3.4% and exports by 0.9%, while the May decline in foreign trade turnover by 2.2% was triggered by a downward trend of imports by 3.3% with a decline in exports of 0.1%, compared with May 2018, a decrease in foreign trade by 3.9% came from a decline in imports - 10.5% with an increase in exports by 11.7%.
The average settlement rate of dram in May 2020 was 484.12 AMD/ $ 1, and in January-May 2020 - 483.95 AMD/ $ 1, against 480.55 AMD/ $ on May 1, 2019 and 485.30 AMD / $ 1 in January-May 2019.
According to new (June) forecasts of the World Bank, the decline in Armenia's GDP in 2020 will be 2.8%. As for Armenia's foreign trade, the WB in the previous forecast (May) expected a 2020 drop in exports and imports by 1.5% and 2.6%, respectively. The IMF in its April forecast expected a 1.5% drop in GDP for Armenia for 2020. According to forecasts of the RA Government for 2020, the decline in GDP will be 2%. The forecast of the Central Bank of the Republic of Armenia (March) portends a slowdown in GDP growth in 2020 to a stagnant 0.7% (from the actual 7.6% growth in 2019).
It should be noted that since March 16, as part of measures to prevent the spread of the coronavirus pandemic, a State of Emergency has been introduced, which will last until July 13 inclusive. In connection with this, a temporary ban was imposed on many types of activities in the first month of emergency (including restaurants, cafes, bars, casinos, hotels, canteens, retail facilities and industries not related to food and medical products). As part of the ban, public transport (including the metro) was suspended in the republic and the movement of other vehicles (except for taxis) was restricted, and international aviation, rail and bus services were limited. The ban was partially lifted in the second half of April, then from May 4 the list of permitted types of economic activity was further expanded to ensure the vital functions of the economy, and from May 18 the ban was lifted almost completely. From the same day, public transport (including the metro) and many public catering facilities and services began to operate, but so far the activities of international air, rail, and bus services have been limited.
