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EXPORTS AND INDUSTRIAL PRODUCTION DRIVE ARMENIA'S REAL ECONOMIC ACTIVITY IN JANUARY-SEPTEMBER
IHS Global Insight
October 29, 2013
by Lilit Gevorgyan
Armenia's real GDP expanded in the first nine months of 2013 by 3.2%
in annual terms, according to the preliminary data by the country's
Statistical Service. Industrial production and net exports were the
key contributors to the real GDP growth, expanding by 7.0% year on year
(y/y) and 8.1% y/y, respectively, during January-September 2013.
Along with industrial production, the 5.5% y/y increase in agricultural
output was another major contributor to the overall economic activity
on the supply side. In addition, the latest data revealed that trade
volume during January-September increased by 2.8% y/y, while services
sector, excluding trade, increased by 2.8% y/y.
Conversely, construction activity continued shrinking, down by 9.2%
y/y, reflecting poor domestic demand as well as expensive and tight
lending conditions offered by Armenia's financial institutions.
Electricity production also declined 4.1% y/y, according to the
latest data from the Statistics Service. The data release further
demonstrated that nominal monthly wages were up by 4.0% y/y, while
consumer price inflation stood at 5.6% in January-September.
Significance:In its latest round of review, IHS Global Insight
continues to believe that Armenia's real GDP will increase by 6.4%
in 2013, at a slower pace, compared with a 7.2% expansion of real
economic activity in 2012. With agriculture being a large component of
the overall economy, we expect the sector's output to boost economic
activity in the latter part of 2013. Harvest is reported to be better
than normal, despite adverse weather conditions in April-May 2013.
However, construction and general investment levels remain a serious
drag on the overall economic performance and are unlikely to pick up
anytime soon. Downsized government investment is another drawback
for the real GDP developments, as highlighted in the recent IMF
summary of Armenia's economic performance. Against this backdrop,
we are likely to revise Armenia's real GDP growth for 2013 down,
although not drastically.
IHS Global Insight
October 29, 2013
by Lilit Gevorgyan
Armenia's real GDP expanded in the first nine months of 2013 by 3.2%
in annual terms, according to the preliminary data by the country's
Statistical Service. Industrial production and net exports were the
key contributors to the real GDP growth, expanding by 7.0% year on year
(y/y) and 8.1% y/y, respectively, during January-September 2013.
Along with industrial production, the 5.5% y/y increase in agricultural
output was another major contributor to the overall economic activity
on the supply side. In addition, the latest data revealed that trade
volume during January-September increased by 2.8% y/y, while services
sector, excluding trade, increased by 2.8% y/y.
Conversely, construction activity continued shrinking, down by 9.2%
y/y, reflecting poor domestic demand as well as expensive and tight
lending conditions offered by Armenia's financial institutions.
Electricity production also declined 4.1% y/y, according to the
latest data from the Statistics Service. The data release further
demonstrated that nominal monthly wages were up by 4.0% y/y, while
consumer price inflation stood at 5.6% in January-September.
Significance:In its latest round of review, IHS Global Insight
continues to believe that Armenia's real GDP will increase by 6.4%
in 2013, at a slower pace, compared with a 7.2% expansion of real
economic activity in 2012. With agriculture being a large component of
the overall economy, we expect the sector's output to boost economic
activity in the latter part of 2013. Harvest is reported to be better
than normal, despite adverse weather conditions in April-May 2013.
However, construction and general investment levels remain a serious
drag on the overall economic performance and are unlikely to pick up
anytime soon. Downsized government investment is another drawback
for the real GDP developments, as highlighted in the recent IMF
summary of Armenia's economic performance. Against this backdrop,
we are likely to revise Armenia's real GDP growth for 2013 down,
although not drastically.