Armenia`s economy tries to grow

ArmInfo. In Armenia, economic activity in the first quarter of 2021 decreased by 2% compared to the same period in 2020 (compared to 4% growth in the first quarter of  2020). According to the preliminary data of the RA State Committee,  only the construction sector and the energy complex were in the  growth, while the industrial sector,the agricultural sector, trade,  and the service sector are still in the red.

Thus, the growth of the construction sector by 4.7% and the energy  complex by 1.4% was accompanied by a decline in the industrial sector  by 3.9%, the agricultural sector - by 1%, the trade sector - by 5.6%,  and the service sector - by 8.1%. As a comparison, we note that a  year earlier in the first quarter, only the construction sector was  in decline (9.4%), while the rest of the industries showed growth:   the energy complex - 14.8%, the industrial sector - 8.7%, the service  sector - 5.5%, the agricultural sector - 4.5%, the trade sector -  0.2%.

Meanwhile, in March 2021, compared to February (on a monthly basis),  economic activity increased by 9.6% (against a 0.2% decline in March  2020). Moreover, the upward trend is recorded in all areas, and the  most significant growth is shown by the construction sector and the  energy complex - 23.5% and 16%, respectively, followed by trade and  services with the same 9.5% growth, and the industrial sector with  9.1% growth. A year earlier, in March 2020, compared to February,  only the construction sector was growing (14%), while all other  industries went into decline: the energy complex - 15.4%, the service  sector - 5.8%, the trade sector - 3.5% and the industrial sector -  2%. For the agricultural sector, statistics for the month are not  specified.

On an annual basis (March 2021 to March 2020), economic activity  turned from a 4.9% decline to a 3.8% growth. This is due to the  reversal of the trend in all sectors from downward to upward, with  the most noticeable growth recorded by the energy complex-18.3% and  the construction sector-10.8%, with a more modest 3.8% in the  industrial sector, 4.6% in trade, and a meager 0.9% in services. A  year earlier, in March 2020, by March 2019, these industries were in  decline: the construction sector - 26.2%, the trade sector-9.9%, the  service sector-4.8%, the industrial sector-1.9%, the energy  sector-1%.

According to statistical data in the first quarter of 2021, the trade  sector with a volume of 664.8 billion drams ($1.3 billion) holds the  lead in absolute terms. In the second place in terms of volume, the  industrial sector - 470.4 billion ($897.5 million), in the third -  the service sector - 403.98 billion drams ($770.7 million), in the  fourth - the agricultural sector - 75.4 billion drams ($143.9  million), and in the fifth - the construction sector - 48.8 billion  drams ($93.1 million). The volume of electricity generation in  January-March 2021 amounted to 2112.9 million kWh, of which only in  March - 736.1 million kWh.

The industrial product price index increased in January-March 2021 by  7.1% compared to the same period last year, only in March - increased  by 1.8%, and in comparison with March 2020 - increased by 9.3%, while  a year earlier the dynamics was negative: in January-March 2020 - a  decline of 0.1% per annum, in March - a decline of 0.4%, in  comparison with March 2019 - a decline of 1.7%.

At the same time, Armenia's foreign trade turnover in January-March  2021 amounted to 791.3 billion drams ($1.509 billion) with an annual  decline of 4.4%. In its structure, the volume of exports underwent an  annual growth of 3.4% to 300.4 billion drams ($572.9 million), and  imports - a decline of 7.7% to 490.9 billion drams ($936.4 million).   Only in March 2021, foreign trade turnover increased by 12.8% due to  an increase in exports by 11.6% and imports by 13.5%. In March 2021,  by March 2020, the growth of exports by 21.8% and imports by 5%  turned the dynamics of foreign trade turnover towards 10.7% growth. A  year earlier, in January-March 2020, foreign trade turnover suffered  an annual decline of 4% due to a decline in imports by 6.2% with a  stagnant export growth of 0.2%, in March 2020, a decline in exports  by 13.3% and imports by 4.9% turned the dynamics of foreign trade  turnover towards a decline of 7.9%, and compared to March 2019, a  decline in foreign trade turnover by 16% was triggered by a decline  in both exports by 17.4% and imports by 15.3%.  The average  settlement rate of the dram was 527.67 DR/$1 in March 2021, and  524.14 DR/$1 in January-March, compared to 489.01 DR/$1 in March 2020  and 482.32 DR/$1 in January - March 2020.  It should be noted that  the RA state budget for 2021 provides for GDP growth of 3.2%. The  Central Bank of Armenia forecasts GDP growth of 1.4% for 2021. The  IMF's forecast for Armenia's GDP growth in 2021 looks more  conservative - 1%. And the World Bank predicted 3.4% GDP growth in  Armenia in 2020.  Recall that in 2020, as part of measures to prevent  the spread of the coronavirus pandemic, a state of emergency was  introduced in Armenia from March 16, which lasted until September 12,  but security measures were maintained even after the state of  emergency was lifted. In this regard, a temporary ban was imposed on  many types of economic activity in the first month of the emergency,  which was partially lifted in the second half of April, and the  complete lifting of the ban followed from May 18. From the same day,  public transport began to work (including metro) and many public  catering and service facilities, but international air, rail, and bus  services were still restricted, but restrictions on entry and exit to  Armenia across the air borders were lifted on September 2.