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Armenian Trade Gap Widens Sharply over 2007

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  • Armenian Trade Gap Widens Sharply over 2007

    Global Insight
    January 25, 2008


    Armenian Trade Gap Widens Sharply over 2007

    by Venla Sipila



    According to the latest preliminary data from the National
    Statistical Agency, Armenian exports over 2007 totalled some $1US.22
    billion, increasing by 23.7% compared to 2006, ARKA News reports.
    While this rate marks high growth at face value, the increase in
    imports far surpassed export growth; imports surged by 49.7% from the
    previous year, amounting to around $3US.28 billion for 2007 as a
    whole. Thus, the trade deficit for last year came in at $2US.06
    billion. Further, it was reported that exports excluding diamonds
    trade came in at a total of some $1US.05 billion in 2007, increasing
    by 38.7% y/y from the previous year, while imports soared by 58.4%
    y/y, reaching $3US.12 billion. Finally,Black Sea Pressreports that in
    December alone, Armenia's total exports increased by 28% y/y and
    imports rose by 16.6% y/y.

    Significance:Armenia's trade deficit widened by 73% in 2007 from the
    previous year, which is still somewhat more than we expected. The now
    reported trade deficit corresponds to some 22% of the annual GDP,
    compared with 19% registered for this ratio in 2006. The soaring
    trade gap is further reflected in the current account (see Armenia: 2
    January 2008: ). The Armenian trade gap is expected to remain fairly
    wide over the coming year, as export demand stays weak and the sector
    to an extent dependent on diamond trade. In addition, import growth
    is likely to remain vigorous, even it if should moderate somewhat
    together with overall growth and domestic demand. However, the
    government aims to develop regional trade ties, notably with Russia
    and Georgia, as well as seeking trade agreements with parties such as
    Iran.
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