Monday, December 6 2021 15:48
Karine Melikyan

Armenia`s economic activity recovers very slowly

Armenia`s economic activity recovers very slowly

ArmInfo.Armenia's economic activity in January-October 2021 increased by 4.3% (against a decline of 6.7% a year earlier), while in the pre-COVID period 7.1% growth  was recorded (in the same period in 2019). This is evidenced by the  final data of the RA Statistical Committee.

In October of this year by October 2020 economic activity rose by  3.6% (versus a decline of 8.1% a year earlier), while in the  pre-COVID period growth of 7.7% was recorded. At the same time, in  October 2021 alone, economic activity decreased by 4.9% (as in the  previous year) from the September 12.6% growth, which was also  observed in the pre-COVID period - a 4.7% decline in October 2019  after the September 7.8% growth.  According to statistics, the growth  drivers of economic activity in January-October 2021 were the trade  sector (by 7%), the service sector (by 6.4%) and the construction  sector (by 6.1%). At the same time, the industrial sector showed  insignificant growth - 1.1% alone. And the energy complex was in  decline - by 3.1%. For the agricultural sector, data are published  only on a quarterly terms. A year earlier, in January- October 2020,  the only sectors that remained in growth were the industrial sector  and the energy complex - 0.5% and 1.7% per annum, respectively. And  the rest of the industries showed a serious decline:  construction -  by 13.3%, services - by 12.8%, trade - by 12.5%.

The industrial product price index increased in January-October 2021  compared to the same period in 2020 by 9.9%, in October 2021 compared  to October 2020 - by 10.8%, and in October 2021 alone the growth  slowed down to 0.2% from September 2.7%. A year earlier, in  January-October 2020, compared to the same period of 2019, the  industrial product price index increased by 2%, in October 2020,  compared to October 2019, by 4.1%, and in October 2020 alone, it  decreased by 0.7% after the September growth by 0.9%.

On a monthly terms (for October), a deterioration in dynamics was  observed in the trade and service sectors - to a 3.8-1.5% decline  from the September 1.6-3.4% growth. And the rest of the sectors  showed growth:  the industrial sector - with an acceleration of rates  up to 9.6% from September 5.9%, the energy complex - with an output  of positive 5.8% from the September 4.5% decline, the construction  sector - with a slowdown to 5.5% from September 10.1%. A year  earlier, in October 2020, only the industrial sector and the  construction sector showed growth - 3.2% and 3%, respectively, and  the rest of the sectors were in decline: trade - by 13.4%, the  service sector - by 2.9%, and the energy complex - by 1.8%.

On a y-o-y terms (from October 2021 to October 2020), only in the  energy complex a decline of 6.2% was observed (against 3% growth a  year earlier), and the rest of the sectors showed growth. In  particular, the services and trade sectors showed the greatest growth  - by 14.6% and 12.7%, respectively, and the growth in the  construction and industrial sectors looked much more modest - by 4.9%  and 3.9%, respectively. A year earlier, in October 2020, by October  2019, in addition to the energy complex, the construction sector also  maintained growth (by 0.3%), and the rest of the sectors were in  decline: the service sector - by 21%, the trade sector - by 20.9%,  the industrial sector - by 3%.

According to statistics in January-October 2021, the absolute  leadership is held by the trading sector with a volume of 2.7  trillion drams ($ 5.3 billion). The second place was held by the  industrial sector with a volume of 1.8 trillion ($ 3.6 billion), the  third was held by the services sector - 1.5 trillion drams ($ 3  billion). And the fourth place, due to the lack of data on the  agricultural sector, is occupied by the construction sector - 306.4  billion drams ($ 601.5 million). The volume of electricity generation  in January- October 2021 was 6 .163.2 million kWh, of which 582.3  million kWh fell on October.

Armenia's foreign trade turnover in January-October 2021 amounted to  3.3 trillion drams ($ 6.5 billion), which is 13.6% higher than a year  ago. Moreover, the increase in export volumes turned out to be more  significant - by 16.9% to 1.2 trillion drams ($ 2.4 billion) than  imports - by 11.8% to 2.1 trillion drams ($ 4.1 billion). In October  2021, the growth of foreign trade turnover accelerated from 1.3% to  12.5%, due to the reversal of the dynamics of exports from a 16%  decline to 16.7% growth, while the growth of imports slowed down from  12.2% to 10. 5%. And in October 2021 compared to October 2020, the  growth of foreign trade turnover by 24.1% was provoked to a greater  extent by the growth of imports by 29.4% than exports by 14.7%.

A year earlier, in January-October 2020, a decline in Armenia's  foreign trade turnover by 11.4% was provoked by a decline in imports  by 14.9% and exports by 4.4%, in October alone, foreign trade  turnover decreased by 4.3% due to a decline in exports- by 12.9% with  an increase in imports by 1.2%, and compared to October 2019, the  decline in foreign trade turnover by 18.5% came from a decline in  imports by 24.3% and exports by 5.4%.

The average calculated exchange rate of the dram was in October 2021.  479.25 AMD / $ 1, and in January- October 2021 - 508.24 AMD / $ 1.

To note, according to the new October forecast of the World Bank, the  expectations for GDP growth in Armenia for 2021 have been improved  from the previous 3.4% to the updated 6.1%. In particular, in the  sectoral breakdown, the WB sees the service sector as growth drivers  of the Armenian economy in 2021 - with a 7.4% growth (out of a 9.8%  decline in 2020), the agricultural sector - with a 6.4% growth (from  4.1% decline in 2020) and the industrial sector - with access to  3.5th growth (out of 3% decline in 2020).  But in the medium term (in  2023), the service sector and the agricultural sector will slow down  growth rates to 5.9% and 3.9%, respectively, and the industrial  sector, on the contrary, will accelerate growth to 5.1%. In terms of  foreign trade turnover, the WB also predicts an exit from recession  to growth in 2021.  Thus, according to the WB estimates, exports will  grow by 6.5% in 2021 (from a 32.4% decline in 2020), with an  acceleration in 2022 to 10.8% and in 2023 to 12.5%, and imports - by  5.6% growth (from a 31.7% decline in 2020), with an acceleration in  2022 to 9.5% and a subsequent full recovery in 2023 of growth at the  level of 12.8%.


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