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ARMENIAN ECONOMY STARTS 2012 WITH SLOWING GDP EXPANSION, STALLING EXPORT GROWTH
Global Insight
March 1, 2012
According to the monthly indicator of economic activity published by
the Armenian Statistical Service, the economy in January expanded
by 4.4% year-on-year (y/y). This growth rate marks weakening
compared with the December 2011 gain of 6.1% y/y. Meanwhile,
economic activity contracted to less than half of its level in
December. Agricultural output remained virtually stable in annul
comparison, while construction activity only managed to expand by a
marginal rate of 0.5% y/y. Conversely, the industrial sector managed
to perform better, expanding by 21% y/y. In addition, it was reported
that exports from Armenia started the year on a weak note, edging up
by just 0.4% y/y, while imports gained 6.6% y/y. These developments
resulted in a trade deficit of USD202.9 million. In addition, ARKA News
reports on further details from the Statistical Service, noting that
exports of non-precious metals in January fell by around 15% y/y, while
exports of mining products fell by 7.7% y/y, whereas those of precious
and semi-precious metals more than doubled in annual comparison.
The first estimates of economic growth for 2011 as a whole put
expansion at 5.9%, somewhat above expectations. Meanwhile, exports
over the whole of last year rose by 28%, while imports increased
by 11%, producing a trade deficit of around 26% of GDP (seeArmenia:
1 February 2012:).
Significance:The first data on economic activity in 2012 continue
to signal a sharp downturn in the construction sector, as well as
continued marked strength of industrial production. Generally, the
data fairly well fit IHS Global Insight's near-term outlook for the
economy; we expect economic expansion this year to decelerate, while
still remaining respectable, at around 3%. The projections count on
a fairly strong harvest, reasonably well performing service sector,
and persistently high metal prices, at least in the first half of the
year. The latter will boost export values and support the industrial
sector. Given the importance of remittances for the country, however,
the uncertainty related to the external environment also poses risks
to the Armenian economic performance.
From: Baghdasarian
Global Insight
March 1, 2012
According to the monthly indicator of economic activity published by
the Armenian Statistical Service, the economy in January expanded
by 4.4% year-on-year (y/y). This growth rate marks weakening
compared with the December 2011 gain of 6.1% y/y. Meanwhile,
economic activity contracted to less than half of its level in
December. Agricultural output remained virtually stable in annul
comparison, while construction activity only managed to expand by a
marginal rate of 0.5% y/y. Conversely, the industrial sector managed
to perform better, expanding by 21% y/y. In addition, it was reported
that exports from Armenia started the year on a weak note, edging up
by just 0.4% y/y, while imports gained 6.6% y/y. These developments
resulted in a trade deficit of USD202.9 million. In addition, ARKA News
reports on further details from the Statistical Service, noting that
exports of non-precious metals in January fell by around 15% y/y, while
exports of mining products fell by 7.7% y/y, whereas those of precious
and semi-precious metals more than doubled in annual comparison.
The first estimates of economic growth for 2011 as a whole put
expansion at 5.9%, somewhat above expectations. Meanwhile, exports
over the whole of last year rose by 28%, while imports increased
by 11%, producing a trade deficit of around 26% of GDP (seeArmenia:
1 February 2012:).
Significance:The first data on economic activity in 2012 continue
to signal a sharp downturn in the construction sector, as well as
continued marked strength of industrial production. Generally, the
data fairly well fit IHS Global Insight's near-term outlook for the
economy; we expect economic expansion this year to decelerate, while
still remaining respectable, at around 3%. The projections count on
a fairly strong harvest, reasonably well performing service sector,
and persistently high metal prices, at least in the first half of the
year. The latter will boost export values and support the industrial
sector. Given the importance of remittances for the country, however,
the uncertainty related to the external environment also poses risks
to the Armenian economic performance.
From: Baghdasarian