BUSINESS ENVIRONMENT INDEX MAKES 86.7% IN ARMENIA IN SECOND QUARTER OF 2008 AS COMPARED WITH SAME QUARTER OF 2007
Noyan Tapan
Ju ne 23, 2008
YEREVAN, JUNE 23, NOYAN TAPAN. In the second quarter of 2008,
Armenia’s economic indices made: the business environment index –
49.1 against 50.5 in the first quarter, the economic activity index –
79.3 against 65.6 in the first quarter, and the consumer confidence
index – 49.5 against 53.5 in the first quarter.
NT was informed by the PR service of the Central Bank of Armenia
(CBA) that although in the second quarter of 2008, two of the indcated
indices had a tendency to decline, they were at a stable level: over
45. The business environment index made 97.1%, as compared with the
same quarter of 2007 – 86.7%, the economic activity index – 120.8%
and 114.2% respectively, and the consumer confidence index – 92.4%
and 93.9% respectively.
Since early 2005, the CBA has conducted quarterly surveys of financial
and nofinancial organizations and households for calculation of the
indicated indices. The purpose of surveys to assess the change in
the current economic situation as compared with the previous period
and the economic expectations of surveyed entities, and to calculate
the economic indices based on the survey results.
494 organizations of industry, construction and service sectors were
studied in the quarter under review. 1,839 households in Yerevan and
all Armenian marzes (provinces) were surveyed by the Internet, phone
or letters. The business environment, economic activity and consumer
confidence indices were calculated based on the survey results. The
business environment index is calculated by averaging the estimates
of the organizations on the risks and changes in the overall economic
situation, the economic activity index – by averaging the expectations
of the organizations on demand and stocks of production volumes,
products and services. The consumer confidence index is calculated
by averaging the index of current conditions (the average of the
estimates on big purchases, the change in incomes and the current
economic condition as compared with the previous quarter) and the index
of future conditions (the average of the expectations on purchases,
a change in incomes and employment in the coming quarter).
The indices calculated as compared with the same quarter of the
previous year explain most exactly the actual tendencies in the
economy as they rule out the factor of seasonal fluctuations.
The questions asked for calculation of the indices are of qualitative
character. The answers have the folloing choices: "growth", "unchanged
level", "decline". Based on the answers, the share of each choice
in the total number of answers is calculated, then the share of the
positive answers is added to half the share of the neutral answers and
the balances of the answers are obtained. The balances range from 0 to
100. The value 0 of the balance shows that all the respondents noted
a decline, the value of 100 shows a growth, while the value of 50 –
a stable state (the number of respondents expecting a growth is equal
to that of repondents expecting a decline). The range of the balance
from 45 to 55 is seen as a stable level.
The relation of the answer balances to the respective indices of the
the base period gives the final indices.