Republic of Armenia
Country Facts
Federation of Euro-Asian Stock Exchanges
Armenian economy expanded at 7.6% in the first half of 2017 and slightly increased the rate up to 7.7% at the end of 2017 which is significantly higher compared to 0.5% growth over 2016. Industry sector kept pace with overall economic growth, and the annualized rate was 12.6%, excluding construction sector. Agricultural sector indicated 3% drop, and the reason for the decline was 7.2% shrink in crop production subindustry which was affected by bad weather. Construction sector was restrained by only 2.2% growth over 2016, and the biggest drag for such a low rate was 26.1% fall in public investment construction subsector.
Service subsectors benefited from the increase in demand and grew by 14.4% during 2017, excluding trade sector. Private consumption grew by an estimated 6.0% in the first half of 2017 compared to the same period in 2016. As the government contained wages and pensions, public consumption has increased only by 2.0% in the first half of 2017. Government capital spending and gross fixed capital formation were low in the first half of 2017 but the significant inventory restocking resulted in 7.0% growth in total investments.
The Central Bank of Armenia reduced its policy rate to 6.0% to support the growth in economy. Money multiplier has increased over the year 2017 from 2.29 to 2.49, and the total amount of loans also grew by 10.5%. In contrast with 2016 1.4% deflation, in 2017, annual inflation rate was 1%. Target band for inflation of the Central Bank of Armenia was 2.5%-5.5% and the actual inflation stood at 2.6% month on month in December 2017.
The trade deficit increased by 30.9% compared to the year of 2016 and according to the Central Bank of Armenia forecast of 6.4% growth in GDP, current account deficit may result in 35.89% portion of 2017 GDP. Receipts from tourism, information technology and construction services continued to grow and resulted in surplus in the service account.
Capital Market Information
Armenian economy expanded at 7.6% in the first half of 2017.
Economic Development and Outlook
Inflow of non-commercial remittances to Armenia totalled $1,756.4 million which is more than a year before by $223.6 million or 14.5%. Despite of increase in inflows, net inflow of non-commercial transfers trough banks shrank by 1% and totalled $708.2 million, and the reason is increase in transfers from Armenia to abroad by $231.2 million or 28.3% compared to 2016. *
*Source: ARKA news agency, Armbanks (n.d.), Armstat (n.d.), Asian Development Bank (2017).
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