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Global Insight
August 23, 2012
Strong Armenian Economic Activity Maintained Through July As Trade
Remains in Deficit
by: Venla Sipila
The latest indicator of economic activity published by the National
Statistical Office put Armenian expansion in January-July at 7.7%
year-on-year (y/y), ARKA News reports. This suggests a fairly stable,
strong performance compared with the first-half gain of 7.8% y/y.
Further details given by Deputy Finance Minister Vartan Aramian, the
industrial and agricultural sectors performed particularly well, the
former seeing production increase by 13.4% and the latter by 10.2%
y/y. Aramian further stated that food production showed a particularly
strong contribution. In addition, other National Statistical Office
figures suggest that external trade in July posted a fairly stable
deficit compared to June. Exports for January-July increased by
6.4%y/y while imports gained 13.1% y/y, producing a trade gap of
around USD1.5 billion. This marks widening of 3.2% in annual
comparison.
Significance:While actual GDP growth is likely to prove more modest
than the gain in the activity indicator, developments in the indicator
can be interpreted as sings of overall trends in the economy. The
Armenian economy is currently performing well. Of particular interest
is the information given by Aramian, suggesting that industrial
production growth greatly relied of the food sector. This is positive
news not only because it suggests at least somewhat weaker reliance on
the mining sector, which remains vulnerable to external factors, but
also because it gives hope of lower dependence on food imports.
However, the typically relatively important construction sector has
been contracting according to latest data. In any case, the following
months and quarters should bring some moderation to growth, while the
instability of the external environment marks important risks both to
economic activity and exports. In addition, they indirectly may also
impact imports, given that lower remittance inflows would suppress
supply of foreign currency, leading to dram weakening and a higher
import bill.
From: Baghdasarian
August 23, 2012
Strong Armenian Economic Activity Maintained Through July As Trade
Remains in Deficit
by: Venla Sipila
The latest indicator of economic activity published by the National
Statistical Office put Armenian expansion in January-July at 7.7%
year-on-year (y/y), ARKA News reports. This suggests a fairly stable,
strong performance compared with the first-half gain of 7.8% y/y.
Further details given by Deputy Finance Minister Vartan Aramian, the
industrial and agricultural sectors performed particularly well, the
former seeing production increase by 13.4% and the latter by 10.2%
y/y. Aramian further stated that food production showed a particularly
strong contribution. In addition, other National Statistical Office
figures suggest that external trade in July posted a fairly stable
deficit compared to June. Exports for January-July increased by
6.4%y/y while imports gained 13.1% y/y, producing a trade gap of
around USD1.5 billion. This marks widening of 3.2% in annual
comparison.
Significance:While actual GDP growth is likely to prove more modest
than the gain in the activity indicator, developments in the indicator
can be interpreted as sings of overall trends in the economy. The
Armenian economy is currently performing well. Of particular interest
is the information given by Aramian, suggesting that industrial
production growth greatly relied of the food sector. This is positive
news not only because it suggests at least somewhat weaker reliance on
the mining sector, which remains vulnerable to external factors, but
also because it gives hope of lower dependence on food imports.
However, the typically relatively important construction sector has
been contracting according to latest data. In any case, the following
months and quarters should bring some moderation to growth, while the
instability of the external environment marks important risks both to
economic activity and exports. In addition, they indirectly may also
impact imports, given that lower remittance inflows would suppress
supply of foreign currency, leading to dram weakening and a higher
import bill.
From: Baghdasarian