Armenia`s foreign trade deficit increased by 13% in August 2020

ArmInfo. A more impressive decline in imports compared to exports reduced Armenia's foreign trade deficit in January-August 2020 by 18% per annum. At the same  time, in August 2020 alone, the growth of this indicator accelerated  to 13% from 7% in July, against the background of a more accelerated  growth of imports than exports. And in August 2020, compared to  August 2019, the foreign trade deficit decreased by 5% as a result of  an almost equal decline in exports and imports.

According to preliminary data of the RA Statistical Committee,  Armenia's foreign trade turnover in January-August 2020 turned  towards a decline of 10.2% from 2% growth a year earlier, which is  due to a deterioration in the dynamics of both exports - from 4.6% to  6 % decline, and imports from 0.7% growth to 12.4% decline. As a  result, Armenia's foreign trade turnover amounted to $ 4.4 billion in  January-August 2020, in particular, exports - $ 1.6 billion and  imports - $ 2.8 billion, which formed a foreign trade deficit of $  1.2 billion.

In August 2020 alone, foreign trade turnover accelerated growth to  5.8% from 3.3% in July due to a more noticeable acceleration in  import growth - from 4% to 7.3%, rather than exports - from 2.1% to  3.4% . As a result, Armenia's foreign trade deficit amounted to $  175.8 million in August 2020, this time showing an increase (by 13%)  against a decline of 7% in the same month of 2019. A year earlier, in  August 2019, foreign trade turnover was in decline by 1.6% due to a  decline in imports by 2.8% with a stagnant 0.6% growth in exports.

In y-o-y terms (August 2020 to August 2019), the decline in foreign  trade turnover by 4% was provoked by a decline in exports by 3.8% and  imports by 4.1%. A year earlier, in August 2019 versus August 2018,  export growth by 13.5% with a decline in imports by 2.8% kept the  foreign trade turnover growing by 2.5%.

According to statistics, the economic activity of Armenia in  January-August 2020 decreased by 6.4% per annum, against an increase  of 7% in the same period of 2019. In August 2020 alone, economic  activity increased by 7.4%, after an increase of 9.7% in July and  against an increase of 7.2% in August 2019. In y- o-y terms (August  2020 versus August 2019), economic activity decreased by 9.8%  (against an increase of 7.6% in August 2019 versus August 2018).

To note, in mid-September, the Central Bank of the Republic of  Armenia revised its GDP forecast for 2020, worsening it towards a  larger decline - by 6.2% instead of the previously predicted 4%  (against the actual 7.6% growth in 2019). While the Central Bank made  the latest forecast for foreign trade in June, according to which a  decline in imports by 15-17% and exports by 12-15% is expected in  2020 (against actual growth in 2019 by 9.1% and 10.3%, respectively).

To recall, a state of emergency was introduced in Armenia since March  16, as part of measures to prevent the spread of the coronavirus  pandemic, which was extended monthly and was lifted from September  12, while maintaining restrictive security measures. In this regard,  a temporary ban was imposed on many types of activities in the first  month of the state of emergency (including restaurants, cafes, bars,  casinos, hotels, canteens, shopping facilities and industries not  related to food and medical products). As part of the ban, the work  of public transport (including the metro) was suspended in the  republic and the movement of other vehicles (except for taxis) was  restricted, 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 in order to ensure the vital activity of the  economy, and from May 18 the ban was lifted almost completely. From  the same day, public transport (including the metro) and many  catering and services facilities began to work, but so far the  activities of international air, rail, and bus communication remained  limited. From September 2, restrictions on entry and exit to Armenia  through the air borders were lifted, and bans on communication only  across land borders remain.