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Global Insight
February 1, 2013
Armenian trade gap remains wide during 2012
by Venla Sipila
Armenian goods trade continues to signal significant external
financial risks. According to the latest customs-based trade figures
published by the Armenian National Statistical Service, exports over
the whole of 2012 totalled USD1.4 billion, rising by 7.0% from 2011,
while imports climbed by 2.9%, reaching USD4.3 billion. As a result,
the trade balance showed a deficit of USD2.8 billion, remaining nearly
stable compared with 2011. In December alone, exports increased by
10.7% year-on-year (y/y), while imports rose by 7.1% y/y.
Significance:Last year saw the recent trade trends continuing, in that
export growth proved higher than the gain of imports. This has been
the case since 2010, following a deep contraction in both during the
crisis year of 2009. Prior to this, import growth had for several
years registered clearly unsustainably high rates, significantly above
export gains. Even with the latest indicators of economic activity
suggesting that GDP growth for the whole of last year may come in
somewhat above our latest forecast, it still seems likely to us that
the ratio of trade deficit to GDP in 2012 will remain relatively
stable compared with 2011, at around 27-28%. Even if the customs-based
trade gap remained more or less stable in annual comparison, the trade
deficit on a balance-of-payments basis is still expected to narrow
somewhat in 2012 as a whole. This should allow for some improvement in
the overall current account gap for 2012, as already suggested by the
improvement of some 10% y/y seen in the January-September 2012 current
account data (seeArmenia: 10 January 2013:). Nevertheless, Armenia's
external imbalances are clearly unsustainable. On the other hand,
continued access to concessional lending should keep the external
financing requirement manageable in the medium term.
February 1, 2013
Armenian trade gap remains wide during 2012
by Venla Sipila
Armenian goods trade continues to signal significant external
financial risks. According to the latest customs-based trade figures
published by the Armenian National Statistical Service, exports over
the whole of 2012 totalled USD1.4 billion, rising by 7.0% from 2011,
while imports climbed by 2.9%, reaching USD4.3 billion. As a result,
the trade balance showed a deficit of USD2.8 billion, remaining nearly
stable compared with 2011. In December alone, exports increased by
10.7% year-on-year (y/y), while imports rose by 7.1% y/y.
Significance:Last year saw the recent trade trends continuing, in that
export growth proved higher than the gain of imports. This has been
the case since 2010, following a deep contraction in both during the
crisis year of 2009. Prior to this, import growth had for several
years registered clearly unsustainably high rates, significantly above
export gains. Even with the latest indicators of economic activity
suggesting that GDP growth for the whole of last year may come in
somewhat above our latest forecast, it still seems likely to us that
the ratio of trade deficit to GDP in 2012 will remain relatively
stable compared with 2011, at around 27-28%. Even if the customs-based
trade gap remained more or less stable in annual comparison, the trade
deficit on a balance-of-payments basis is still expected to narrow
somewhat in 2012 as a whole. This should allow for some improvement in
the overall current account gap for 2012, as already suggested by the
improvement of some 10% y/y seen in the January-September 2012 current
account data (seeArmenia: 10 January 2013:). Nevertheless, Armenia's
external imbalances are clearly unsustainable. On the other hand,
continued access to concessional lending should keep the external
financing requirement manageable in the medium term.