Construction was the driver of economic growth in Jan-May 2018 in Armenia while industrial sector’s growth slackened

Karina Melikyan. In Armenia, economic activity in January-May 2018 increased by 8.6% y-o-y at the background of growing rates of import compared to export. In May this year versus May 2017, economic activity increased by 5.4%, and in May 2018 alone increased by 10.4%. A year earlier, in January-May 2017, versus the same period of 2016, economic activity increased by 6.4%, in May compared with May 2015 – by 8.9%, and in May alone – by 11.7%.

According to the preliminary data of the National Statistical Service of Armenia, the growth in economic activity in January-May 2018 was mainly ensured by the services sector – by 17.5% y-o-y, the construction sector – by 17.4% and the trade sector – by 10.2%, while growth in industrial and agricultural sectors was more moderate-3.3% and 1.5% respectively. Against this background the energy sector registered no growth. It is noteworthy that versus the indicators of the previous year the agriculture and construction sectors demonstrated increase, construction sector registering sharp growth. A year earlier, in January- May 2017, the industrial sector, trade, services, energy complex demonstrated growth- 14.4%, 12.8%, 11% and 4.6% y-o-y, respectively, and the agricultural sector and the construction sector demonstrated decline – 3.5% and 12.1% respectively per annum. The industrial production price index increased by 3.5% in January-May 2018 versus the same period of the previous year, and grew by 2.1% in May 2018 compared to May 2017. In May 2018 alone it declined by 1.2%. A year earlier, in January-May 2017, in comparison with the same period in 2016, the industrial production price index increased by 3.5%, in May 2017, compared to May 2016 – by 4.7%, and in May 2017 alone increased by 0.2% . In monthly terms (in May) the economic activity grew due to construction sector (42.4% growth versus 50% growth in May 2017), the agricultural sector (by 41.9% against 47.1% a year earlier), industrial sector ranks next with more moderate rates (13.3% growth versus 12.7% growth in May 2017), trade (12.1% versus 6.6% in May 2017) and service sector (6.5% against 9.5% growth a year earlier). Energy sector registered 2.3% growth in May 2018 versus 2.9% decline in May 2017.

In May 2018 versus May 2017 in terms of growth rates, the service sector was leading with 17%, construction and trade registered 8.8% growth both, at this background energy and agriculture had insignificant growth-1.8% and 0.1% respectively. The Industrial sector demonstrated decline by 3.1%, while the rate in previous year was high and even leading. A year earlier, in May 2017 against May 2016, the growth rates were more moderate: industrial sector was leading- 20%, followed by trade-15%, services-14.3% and energy sector-5.6%, while agriculture and construction fields registered decline-4.8% and 9.3% respectively.

According to statistical data in January-May 2018, the trade sector held the absolute leading position with the volume of 1.02 billion AMD ($ 2.1 billion). The industrial sector held the second place 658.2 billion ($ 1.4 billion), services were the third – 626.7 billion drams ($ 1.3 billion), agriculture-the fourth -180.3 billion drams ($ 374.1 million), and the construction sector was the fifth-93.7 billion AMD ($ 194.4 million). The volume of electricity generated in January-May 2018 was 3237.7 million kWh, of which 570.7 million kWh in may alone.

At the same time, Armenia’s foreign trade turnover in January-May 2018 was 1351.4 billion AMD ($ 2804.1 million), with annual growth of 32.4%. In its structure, the volume of exports has undergone annual growth of 24.1% to 450.8 billion AMD ($ 935.6 million), and imports – an annual growth of 37% to 900.6 billion AMD ($ 1868.5 million). In May 2018 alone, foreign trade turnover increased by 6.2%, due to the growth in imports – by 11.8% and decline in exports – by 5%, and compared to May 2017, foreign trade turnover increased by 27.9%, mainly due to the growth of imports by 32.8% with an increase in exports by 17.6%. A year earlier, in January-May 2017, Armenia’s foreign trade turnover grew by 23.1% per annum, in particular, exports – by 20.9% and imports – by 24.4%, in May 2017 alone the growth in foreign trade turnover by 35% was conditioned by growth of imports – 45% and 18.3% growth in exports, compared with May 2016 trade turnover grew by 53.4% due to raise in both imports and exports- 61.7% and 38.7% respectively.

The average calculated exchange rate of AMD was 484.09 AMD / $ in May, 2018, and 481.92 AMD / $ 1 in January-May, compared to 483.42 AMD / $ 1 in May 2017 and 485.18 AMD / $ 1 in January -May 2017.