Central Bank of Armenia forecasts increase in exports by 5.1% and  imports by 8.3% for 2022

ArmInfo.The Central Bank of Armenia improved its forecast for 2022, expecting a real increase in exports by 5.1% and imports by 8.3%, against the previously indicated  decline in exports by 1.8% and stagnation in imports. This is noted  in the Monetary Policy Program (MPP) of the Central Bank for Q2 2022,  published at the end of June, which also indicates an improved  forecast for GDP growth for 2022 from the previous 1.6% to an updated  4.9% (against the actual 5.7% growth in 2021).

The upward revision of the export forecast by the Central Bank is  associated with a rapid recovery in the volume of exports of goods  and services to Russia against the backdrop of a rapid adjustment of  the ruble exchange rate. In the context of anti-Russian sanctions,  export opportunities from Armenia will expand to some extent, taking  into account also the potential for export development. At the same  time, the export of mining raw materials will slow down somewhat. As  for the export of services, in the context of maintaining a tangible  flow of international visitors, positive changes are expected in the  growth of the tourism sector, the IT sector, and financial services.

The forecasted increase in imports by the Central Bank is due to the  rapid recovery of deferred domestic demand due to accumulated  savings, as well as the easing of restrictions by European countries.

The Russian-Ukrainian confrontation and anti-Russian sanctions caused  certain changes in the behavior of Russian citizens, as a result of  which, since March 2022, there has been a large influx of  international visitors and foreign capital to Armenia, which is also  reflected in the fundamental revaluation of the Armenian dram.  According to the studies of the Central Bank, the growth in the  influx of international visitors and finance observed during this  period was mainly due to an increase in external demand, which was  reflected in a significant acceleration in the export of services  from Armenia. This is evidenced by the official statistical data on  international tourism, according to which the share of Russian  citizens among tourists visiting Armenia increased in the first  quarter of this year - up to 43.7% from 34.9% a year earlier.

Strong external demand is also evidenced by a jump in the volume of  some services provided, as well as a sharp acceleration of inflation  in segments of the service sector, which are characterized by rather  sharp prices. For example, in the field of accommodation and  catering, the volume of services provided in March- April  significantly exceeded not only the indicator of a year ago, but also  the pre-crisis level. At the same time, the actual rent of housing  has jumped sharply - and this is a significant change in the context  of recent years. In the field of export of services, financial  services are also noteworthy, as evidenced by the sharp increase in  non-deposit accounts of non-resident individuals in Armenian banks in  March-April. Thus, in the current year, from March to April  inclusive, non-resident individuals opened 3.9 thousand deposit  accounts and 33.3 thousand settlement accounts in Armenian banks,  against 3.5 thousand and 12.7 thousand in February, respectively.

Citizens of Russia, Belarus and Ukraine registered more than 1,000  individual entrepreneurs in the state register of Armenia in March,  plus about 300 individual entrepreneurs in April. These are just IT  sector statistics. As a result, the volumes in the field of  information and communications increased sharply in March over April  by almost 35% y / y - up to 33.1 billion drams, a comparison of which  with the number of newly established IPs by non-residents shows that  such an increase in volumes was mainly due to the inflow of foreign  capital and labor migrants.

It should be noted that according to the RA Statistical Committee,  Armenia's foreign trade turnover in 2021 increased by 17.7% - up to  $7.1 billion, against a 13.2% decline in 2020. In its structure, the  volume of exports and imports reached double-digit growth, while a  year earlier both items were in decline, and in 2019 - in almost  equally more modest growth. Thus, the volume of exports changed from  a 3.9% decline to 19.1% growth (against 9.4% growth in 2019),  amounting to $ 3 billion, and imports - from a 17.7% decline to 16.9%  growth (against 10.8% growth in 2019), amounting to $5.4 billion.  Russia is the undisputed leader in Armenia's foreign trade turnover,  both in terms of the overall indicator and in terms of exports and  imports separately. Russia's share in Armenia's foreign trade  turnover in 2021 increased from 30.6% to 31.4%, in particular, in  exports - from 26.8% to 28% and in imports - from 32.6% to 33.3%. In  2021, the volume of exports to Russia increased by 24.5%, while  imports from Russia increased by 19.2%, which ensured the growth of  foreign trade turnover between Armenia and the Russian Federation by  20.9%.