Global Insight
February 22, 2013
Strong growth of Armenian economic activity and exports reported for January
BYLINE: Venla Sipila
The Armenian economy started 2013 on a strong note. According to the
latest indicator of economic activity published by the country’s
National Statistical Service quoted by ARKA News, the economy expanded
by 9.1% year-on-year (y/y) in January. In December 2012, this measure
showed growth of 6.7% y/y, while its annual gain over the whole of
2012 on the average posted 7.2% (seeArmenia: 31 January 2013:). In
particular, industrial output increased by 18.8% in annual terms.
Further details reported byBlack Sea Pressshow that domestic trade in
January increased by 5.7% y/y, while agricultural output increased by
2.1% y/y. Conversely, construction activity retreated by no less than
17.6% y/y. Further, it was reported that exports in January surged by
nearly 55% y/y, while imports rose by 13%. These developments resulted
in a trade deficit of some USD198 million for the month. Last year had
ended with exports rising by 10.7% y/y and imports gaining 7.1% y/y,
resulting in a trade gap of USD2.8% billion for 2012 as a whole
(seeArmenia: 1 February 2013:).
Significance:The indicator of economic activity is fairly new, and has
typically indicated somewhat faster expansion rates than the actual
national accounts data. The latest quarterly GDP data from the
Statistical Office has earlier put third-quarter 2012 growth at 9.3%
y/y, following the respective second- and first-quarter gains of 6.6%
y/y and 5.6% y/y. We estimate that the annual GDP growth rate for 2012
will somewhat fall short from the rate of 6.2% used as the basis for
the budget. The outlook for the coming quarters is fairly positive, as
confirmed by the latest activity indicator. Even with export growth
now clearly higher than the increase in imports, Armenia’s trade
deficit still remains a source of considerable external vulnerability.
Instability of the external environment, in particular, keeps risks
high – both regarding overall growth and external finances –
especially taking into account Armenia’s dependence on remittances and
private capital inflows in general.
From: Emil Lazarian | Ararat NewsPress
