Double-digit growth in economic activity in Armenia is accompanied by  surge in imports and exports

ArmInfo. The growth of economic activity in Armenia accelerated in H1 2022 to 11.8% per annum (from 5% in the first half of 2021), exceeding even the pre-Covid 6.5%  growth in H1 2019, which was accompanied by a surge in imports and  exports.

n June of this year, by June 2021, economic activity  increased by 18.5% (against 8% growth a year earlier and 3.4% growth  in 2019), while in June 2021 alone, accelerating growth to 17% from  6.1% in May (against a similar growth acceleration in June 2021 from  2% to 12%, and a slight slowdown from 8.4% to 8.2% in June 2019).  This is evidenced by the final data of the RA Statistical Committee.

The growth of economic activity in H1 2022 was largely determined by  the service sector - by 26.9%, to a slightly lesser extent by the  energy complex - by 14.8%, the construction sector - by 12.7% and the  trade sector - by 10.7%. In parallel with this, there was an  acceleration in the growth of the industrial sector to 5.8%, and a  5.5% decline in the agricultural sector. A year earlier, in H1 2021,  all these areas, and even the agricultural sector, showed more  restrained growth: the construction sector - 10.8%, the trade sector  - 8%, the agricultural sector - 6.8%, the service sector - 2.7%, the  industrial sector - 2.1% and energy complex - 0.5%.

The industrial products price index increased in H1 2022 compared to  the same period in 2021 by 7.8%, in June 2022 compared to June 2021  it decreased by 1.2%, and in June 2022 alone it lingered in the  decline with an imperceptible slowdown to 2. 9% (from May 3.1%). A  year earlier, positive dynamics was recorded in similar periods: the  price index of industrial products increased in January-June 2021  compared to the same period in 2020 by 10%, in June 2021 by June 2020  - by 15.5%, and in June 2020 alone growth accelerated from 1% to  3.1%.

On a monthly term (for June 2022), the construction sector and the  industrial sector gave a decisive impetus to the growth of economic  activity - by 20.1% and 17.1%, respectively, while a year earlier in  June 2021 the industrial sector was in 0.9% decline, while the  construction sector showed slightly higher growth - by 21.9%. In  terms of growth rates, they are followed by the trade sector - 12.8%,  the service sector - 8%, the energy complex - 6.4%, and the trade  sector and the service sector a year earlier in June 2021 showed a  modest increase - by 7.2% and 3.9%, respectively and the energy  complex was then in decline by 8.2%.

On a y-o-y terms  (June 2022 to June 2021), the growth of economic  activity was observed in all industries, and even the energy complex  recovered from the decline to double-digit growth. Thus, the service  sector increased its volumes by 35.5%, the energy complex - by 25.4%,  the industrial sector accelerated the growth of volumes to 19%, the  trade sector increased its turnover by 18.2%, and the construction  sector increased its volumes by 16.2%. A year earlier, in June 2021  by June 2020, in all industries, except for the energy complex, which  slowed down the decline to 8%, growth was also observed, but the pace  was relatively restrained: the service sector- 12%, the trade sector  - 10.3%, the industrial sector and the construction sector - 1.3%  each.

According to statistical data of January-June 2022, the absolute  leader is the trade sector - 1.8 trillion drams ($3.8 billion). The  second place is occupied by the industry, 1.2 trillion drams ($2.5  billion), the third place is occupied by the service sector - 1.1  trillion drams ($2.4 billion). The fourth place is traditionally  occupied by agriculture - 291.9 billion drams ($623.3 million), and  the fifth place is occupied by the construction sector - 149.03  billion drams ($318.3 million). The volume of electricity generation  in January-June 2022 amounted to 4387.3 million kWh, of which 641.9  million kWh  in June alone.

In the consumer market of Armenia, inflation accelerated in H1 2022  to 8.1%, and 0.3% in June alone, and compared to June 2021 it  increasedto 10.3%, which was also observed last year, but at  relatively low pace:  in H1 2021, inflation was 5.7%, and in June   alone there was a deflation of 0.8%, and compared to June 2020,  inflationary 6.5% was recorded.

At the same time, the foreign trade turnover of Armenia in  January-June 2022 increased by 44% per annum, reaching 2.4 trillion  drams ($5.2 billion). In its terms, high growth was observed both in  imports and exports. In particular, the volume of exports increased  year-on-year by 36.3% to 869 billion drams ($1.9 billion), and  imports - by 48.7% to 1.5 trillion drams ($3.3 billion). In June 2022  alone, foreign trade turnover increased by 20.2% due to an increase  in exports by 38.2% with a more modest 10.4% increase in imports, and  compared to June 2022, the increase in foreign trade turnover by 71%  was more provoked by an increase in imports by 73.1% and, to a  slightly lesser extent, by an increase in exports by 68.1%. A year  earlier, in January-June 2021, foreign trade turnover increased by  13.4% per annum due to the growth of exports by 23.3% and imports by  7.9%, and the June growth of foreign trade turnover by 1.9% was  provoked by the upward dynamics of exports by 12.2% with a decline in  imports by 4.5%, compared with June 2020, the growth in foreign trade  turnover by 20.1% was due to an increase in exports by 33% than  imports by 12.1%.

The average settlement rate of the dram in June 2022 was 422.69  AMD/$1, and in January-June 2022 - 468.24 AMD/$1, against 513.09  AMD/$1 in June 2021 and 522.08 AMD/$1 in January- June 2021

It should be noted that the World Bank revised its forecast for 2022  in early June, improving the expected GDP growth rate in Armenia from  the previous 1.2% to the updated 3.5%. In the middle of June of this  year, the Central Bank of Armenia also revised its forecast for 2022,  indicating a more optimistic GDP growth of 4.9% (against the  previously projected 1.6%). At the end of June, the International  Monetary Fund also improved its 2022 forecast for Armenia's GDP  growth from the previous 1.5% to an updated 5%.  According to actual  statistical data, Armenia's GDP in 2021 reached a 5.7% growth (from a  7.2% decline in 2020),  falling short of a pre-Covid growth rate of  7.6% in 2019.