Service sector and energy complex were major drivers of economic  activity growth in Q1 2022 

ArmInfo.In Armenia, economic activity in Q1 2022 increased by 9.6% compared to the same period in 2021 (against a 2% decline in Q1 2020), exceeding even the pre-Covid  6.5% growth in Q1 2019. According to the final data of the RA  Statistical Committee, the agricultural sector lingered in the  decline, while other sectors showed growth, and the service sector  and the energy complex were the main drivers of economic growth.

Thus, the service sector showed an increase of 22.2%, the energy  complex - by 16.7%, the trade sector - by 7.6%, the construction  sector - by 6.2%, the industrial sector - by 3.1%. And the  agricultural sector lingered in the decline with an acceleration of  rates up to 5.4%. As a comparison, we note that a year earlier in the  first quarter, the construction sector grew by 4.7%, and the energy  complex - by 1.4%, while  the following sectors were in decline  industrial sector - by 3.9%, the agricultural sector - by 1 %, trade  - by 5.6% and services - by 8.1%.

Meanwhile, in March 2022, compared to February (on a monthly terms),  economic activity increased by 8.4% (against 9.6% growth in March  2021). Moreover, upward dynamics was recorded in almost all areas,  except for the industrial sector and the energy complex, which  reduced volumes by 1.3-0.9%. In particular, the construction sector  showed significant growth - by 25%, followed by the service sector  and trade with an increase of 16% and 10.8%, respectively. A year  earlier, in March 2021, compared to February, an upward trend was  recorded in all areas, and the most significant growth was shown by  the construction sector and the energy complex - 23.5% and 16%,  respectively, followed by trade and the service sector with the same  9.5% growth of each, and the industrial sector with 9.1% growth.

In y-o-y terms (March 2022 to March 2021), economic activity  accelerated growth from 3.8% to 6.7%.  Among industries, only the  industrial sector was in decline by 6.9%, while the rest sectors  showed growth:  the service sector - by 25.9%, the construction  sector - by 8.2%, the energy complex - by 6.8%, the trade sector - by  6.6%. A year earlier, in March 2021 by March 2020, all industries  were distinguished by a trend reversal from a downward to an upward  trend: the energy complex - by 18.3%, the construction sector - by  10.8%, the industrial sector - by 3.8%, the trade sector- by 4.6%,  and the service sector - by 0.9%.

According to the statistics for Q1 2022, the trade sector was the  leader in absolute terms with a volume of 781.1 billion drams ($1.6  billion).  The industrial sector was in second place in terms of  volume - 550.7 billion ($1.1 billion), the third - the service sector  - 503.2 billion drams ($1.03 billion), the fourth - the agricultural  sector - 79.1 billion drams ($162.6 million), and the fifth - the  construction sector - 55.96 billion drams ($115 million). The volume  of electricity generation in January-March 2022 amounted to 2465.3  million kWh, of which - 786.4 million kWh in March alone.

The price index of industrial products  in January-March 2022  compared to the same period last year increased by 11.3%,  increasing  by 2% in March alone and compared to March 2021 it increased by  12.5%.  A year earlier, the dynamics was also positive, but were more  modest: in January-March 2021 - an increase of 7.1% per annum, in  March - an increase of 1.8%, compared to March 2020 - an increase of   9.3%.  At the same time, Armenia's foreign trade turnover in  January-March 2022 amounted to 1.02 trillion drams ($2.1 billion)  with  a y-o-y growth of 38.5%. In its structure, the volume of  exports increased by 26.9% per annum to 355.3 billion drams ($731.8  million), while the volume of imports climbed by 45.6% to 664.3  billion drams ($1.4 billion). In March 2022 alone, foreign trade  turnover decreased by 10.6% due to a decline in exports by 12.2% and  imports by 9.8%. In March 2022 by March 2021, the growth of imports  by 22.5% and exports by 4% increased foreign trade turnover by 15.6%. 

A year earlier, in January-March 2021, foreign trade turnover was in  decline by 4.4% due to a decline in imports by 7.7% with an increase  in exports by 3.4%, in March 2021, an increase in exports by 11.6%  and imports by 13 .5% increased foreign trade turnover by 12.8%, and  compared to March 2020, the growth of foreign trade turnover by 10.7%  was provoked by a significant increase in exports by 21.8% and a  modest 5% increase in imports.  

The average settlement rate of the dram in March 2022 was 496.96  AMD/$1, and in January-March - 486.40 AMD/$1, against 527.67 AMD/$1  in March 2021 and 524.14 AMD/$1 in January-March 2021. 

It should be noted that the Central Bank of Armenia forecasts a  slowdown in GDP growth to 1.6% for 2022, expecting a decline in  exports and imports by 1.8-0.1% and inflation of 6.6%. The World Bank  projects a slowdown in Armenia's GDP growth to 1.2% for 2022,  expecting a decline in exports by 8.5% and imports by 12%. The  International Monetary Fund expects a slowdown in Armenia's GDP  growth to 1.5% in 2022. According to actual statistics, Armenia's  GDP, after a 7.4% decline in 2020, went up by 5.7% in 2021.