Analyst: Slump In Exports In January Conditioned By Russian Crisis,


ECONOMY | 24.02.15 | 11:16

ArmeniaNow reporter

While the Armenian government says it is taking all measures to
activate the country’s economy and to disprove negative predictions
of international institutions, economic indexes registered in last
month are already considered alarming by experts.

According to the data published by the National Statistical Service
(NSS), in January this year, compared to January 2014, economic
activity increased by 1.3 percent, and the largest positive progress
was registered in the field of services – 3.8 percent, construction
volume grew by 2.2 percent, agricultural gross production – by 1.8

Other indexes, however, are negative – a 4.3-percent inflation,
electricity production fell by almost 20 percent, a 7.4-percent
decrease was registered in sales, a 6.3-percent decline of volume of
industrial production.

“Compared to last January, this January’s indices are upsetting,
and this is a process that started still last October-December,
it is conditioned by the Russian crisis and the vulnerability
of our economy,” Hayk Gevorgyan, an economic analyst writing for
the pro-opposition Haykakan Zhamanak (Armenian Time) daily, told

Another negative index is more than 30 percent decline of foreign
trade turnover, as well as almost 22 percent decline of export,
which Gevorgyan again explains by the problems in the Russian economy.

“Since the NSS indices are preliminary, and in their report it does
not specify export to which countries declined and for which goods,
it is impossible to say more now. But the main reasons I think
is the Armenian dram’s devaluation to a lesser degree than the
Russian ruble’s, besides exporters are still waiting for new export

According to Gevorgyan, although in any country the national currency’s
devaluation gives an extra trigger to exporters, however, the Russian
market, which our government saw as a potential market for increasing
the export, does not look appealing for businessmen.

“As the dram lost its value by 18 percent, and in Russia the ruble
devaluation was by 100 percent, in Russia the selling price for our
products will be higher than of the products produced locally and,
hence, we cannot export our products to Russia.”

“The Russian market is becoming less and less appealing for us;
that is first of all conditioned by the exchange rate, as I wrote,
the other factor is the decline of the purchasing power [of the
population] in Russia,” the economic analyst added.

At the same time he said that it is not clear how the NSS presents
foreign trade, whether the export to the Eurasian Economic Union
(EEU) states is registered as internal sales or not.

“Maybe such a decline is explained by the fact that after becoming a
member of the EEU, foreign trade with the other EEU-member states is
not registered as foreign trade. That will become clear in one week
when the NSS publishes a more complete report,” Gevorgyan said.

Armenia joined the EEU that also includes Russia, Belarus and
Kazakhstan on January 2.

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