Wednesday, December 28 2022 18:46

ArmInfo.The economic growth rates of the RA continue to be at a fairly high level, however, the negative developments in the industrial sector and changes in the  financial system indicate that the risks of instability remain. This  is stated in the analysis of the socio-economic development of the RA  economy in January-November 2022, made by the Luys Foundation.

The Foundation experts noted that in November of this year there was  some slowdown in economic activity due to strong growth in the  previous year (base effect). However, the aggregate indicator of  economic activity (CEA) remained at a fairly high level, amounting to  14.4% in January-November. At the same time, a decline is observed in  the industrial sector, which is alarming, since high economic growth  is mainly fixed due to the growth of services and trade, which are  not sustainable, and in the event of neutralization of shocks (in the  event of an outflow of citizens of the Russian Federation), a sharp  decline may be recorded, which is fraught with the risk of weakening  the potential of the economy and its export sector.

At the same time, experts forecast a rather modest increase in real  wages in the context of high economic growth, and in the public  sector, the figure is even decreases. In January-October, the average  monthly nominal wage in the economy as a whole increased by 14.0%: in  the public sector - by 4.2%, in the private sector - by 17%.

Over the same period, the average level of consumer prices increased  by 8.7%, which, according to the Foundations's analysts, means that,  in terms of nominal to real, in the economy as a whole, real wages  increased by 4.9%, and in the public sector - decreased by 4.1%.

"It turns out that  the real indicator of economic activity of this  period, real wages grew at a about 3-fold lower rate, and the real  wages in the public sector (including doctors, teachers), even  decreased compared to the previous year," the authors of the document  noted. These statistics, in their opinion, indicate that the economic  growth of the current year is not inclusive and increases inequality,  because if growth is not aimed at raising wages, then it goes to  increase profits. And the profits are mostly received by the  representatives of the rich class.  Changes in the financial system  also cause concern among the experts of the Foundation. It is noted  that foreign currency deposits of non-residents increased sharply in  the banking system, while loans in foreign currency decreased.  Instead, banks issue loans in drams against attracted deposits in  foreign currency. <In the future, in case of devaluation of the dram,  the volume of deposits in the portfolio of banks will increase  sharply, and the volume of loans will decrease, which will lead to  problems related to financial stability. On the other hand, deposits  of enterprises in banks are significantly increasing and the volume  of loans provided by banks to enterprises is decreasing, which may  indicate a decrease in investment activity. The latter is also a  negative factor in terms of the potential of the economy and  long-term stability>, the document says.  - It should be noted that  according to statistical data, in Armenia, the growth of economic  activity in January- November 2022 accelerated to 14.4% per annum  (from 5.2% in the same period of 2021), having also far exceeded the  pre-Covid 7.5% growth in 11 months 2019 The growth of economic  activity in January- November 2022 was largely determined by the  service sector - by 28.2%, and to a lesser extent by the energy  complex - by 16.8%, the trade sector- by 16.2%, the construction  sector - by 13.9%, and the industrial sector - by 8.4%. In November  of this year, by November 2021, economic activity increased by 13.8%,  exceeding not only the 13.2% growth a year ago, but also the 10.1%  growth in the pre-Covid period. In y-o-y terms (November 2022 to  November 2021), all industries, except for the industrial sector,  which was in a 2.3% decline, showed growth: the service sector - by  30.9%, the trade sector - 22.1%, the energy complex - by 17, 3% and  the construction sector - by 11.3%. At the same time, inflation  continues to grow: in January-November 2022, compared to the same  period in 2021, it reached 8.7%; by November 2021 amounted to 8.8%,  with an increase in inflation in November to 1.1% from October 0.3%,  from levels recorded in 2021 in the periods under review - 7.1% in  January-November, 9.6% in November 2021 to November 2020, with an  increase in November to 1.7% from October's inflationary of 0.7%