Armenia`s foreign trade deficit registers decline

ArmInfo. A more impressive decline in imports than exports reduced the foreign trade deficit of Armenia in January-September 2020 by 23.6% per annum (against an  increase of 0.5% a year earlier against the background of an increase  in exports and imports).

At the same time, in September of this year  alone, this indicator decreased by 6% (against the August growth by  13%), against the background of accelerating export growth with a  slowdown in import growth. And in September 2020, compared to  September 2019, the foreign trade deficit decreased by 43.2% as a  result of a significant decline in imports, while exports remained  growing.

According to preliminary data of the RA Statistical Committee,  Armenia's foreign trade turnover in January-September 2020 turned  towards a decline of 10.5% from 5.8% growth a year earlier, which is  due to a more noticeable deterioration in the dynamics of imports -  from 4.7% growth to a 13.7% decline, rather than exports - from 7.9%  growth to 4.4% decline. As a result, Armenia's foreign trade turnover  amounted to $ 5.05 billion in January-September 2020, in particular,  exports - $ 1.83 billion and imports - $ 3.22 billion, which formed a  foreign trade deficit of $ 1.39 billion.  In September 2020 alone,  foreign trade turnover slowed down to 4.9% from 5.8% in August due to  a slowdown in import growth - from 7.3% to 2.7%, while export growth  accelerated - from 3.4% to 8.7%. As a result, Armenia's foreign trade  deficit amounted to $ 154.4 million in September 2020, this time  showing a decline (by 6%) against an increase of 47.4% in the same  month of 2019. A year earlier, in September 2019, foreign trade  turnover grew by 13.1% due to an increase in imports by 20.5% with a  stagnant 0.2% growth in exports.

In y-o-y terms (September 2020 to September 2019), a 12.4% drop in  foreign trade turnover was provoked by a 20.4% decline in imports,  while exports grew by 4.6%. A year earlier, in September 2019 to  September 2018, the growth of imports by 33% and exports by 28.8%  increased foreign trade turnover by 30.1%.

According to statistics, the economic activity of Armenia in  January-September 2020 decreased by 6.6% per annum, against an  increase of 7.1% in the same period of 2019. In September 2020 alone,  economic activity increased by 10.6%, after increasing by 7.4% in  August and against growth by 7.8% in September 2019. In y-o-y terms  (September 2020 to September 2019), economic activity decreased by  7.5% (against an increase of 7.8% in September 2019 to September  2018).

To note, in September, the RA Central Bank 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).  In the direction of a larger decline, the Central Bank also revised  its forecast for 2020 for foreign trade, expecting an equal  subsidence in exports and imports of 29-32% instead of the previously  expected negative 12-15% for exports and 15-17% for imports (against  actual growth in 2019 of exports and imports by 10.3% and 9.1%,  respectively). According to the new (October) forecast of the World  Bank (WB) for 2020, the decline in Armenia's GDP will be 6.3%  (against the previously expected 2.8%), and the decline in exports  and imports will be 12.7% and 15.1%, respectively. The current  account deficit in Armenia, according to new WB expectations, will  decrease from the actual 7.2% of GDP in 2019 to the projected 6.2% of  GDP in 2020.