Armenia to face 4.3 to 4.5% economic decline in 2020 – Jrbashyan

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YEREVAN, August 30. /ARKA/. The economic decline in Armenia by the end of 2020 will be recorded at 4.3-4.5%, Tigran Jrbashyan, an economist and the director of Ameria Consulting Company, told reporters on Friday.

He noted that, according to the previous forecast, for the second quarter, the economic recession at the end of the year was forecasted at 3.2%, but according to estimates for the next quarter, it is already 4.3-4.5% at the end of the year.

“In the previous analysis, we expected that the situation would develop in such a way that in the second quarter the decline would be greater than it turned out, but at the same time, we predicted a faster growth than it actually turned out,” Jrbashyan said.

He explained that in practice the decline was less in the second quarter, but it continued in July. This assumes the curve will not follow the intended direction. This affects the fact that the predicted rapid growth will not occur, but the overall situation will be within 4.3%.

At the same time, he pointed out certain interesting phenomena – at the moment, there is an increase in the average salary in all areas – both the public (7.7% in January-July) and sectors.

The second interesting phenomenon, he said, is that the volume of electricity consumption in January-July increased by 3.4%, compared with the same indicator in 2019.

“The causes may be different, starting from the fact that people being at home in lockdown consumed more electricity, but this is a fact. At the same time, there is an almost dead situation with the consumer price index, compared to 2019 – 1.1%, which also quite an interesting phenomenon, “Jrbashyan said.

Along with that, he noted that the biggest problem in the economy today, which remains, is the index in the service sector (without trade) and there are interesting trends, the reasons for which must be understood.

“There are also problems in the construction sector, but in recent months it has shown active growth, although the restoration of the sector has not yet been ensured – the costs are still estimated at 80% of capital construction in 2019,” Jrbashyan said.

He also mentioned the problems in the industry, pointing out that there is a problem of the base itself, which has changed due to Teghut’s indicators.

According to the National Statistical Committee, the indicator of economic activity in Armenia, according to preliminary data, in January-July 2020 registered a decline of 5.7% compared to the same period in 2019. At the same time, in July 2020, compared to July 2019, the decline was 10.2%, and compared to June 2020, the indicator of economic activity, on the contrary, increased by 9.7%.

According to the National Statistical Committee, Armenia’s GDP growth in the first quarter of 2020 amounted to 3.8% compared to the same period in 2019, reaching an absolute figure of 1 trillion 241 billion drams.

According to the new forecast of the central bank, economic growth in 2020 will be minus 4%, against the earlier projected 0.7% growth. In its earlier forecasts, the Central Bank assumed that economic growth will mainly recover in 2021, amounting to 7.2%.

On April 29, the National Assembly of Armenia approved a revision of budgetary indicators because of COVID-19. Taking into account the adverse impact of the coronavirus, the budget forecast for GDP was lowered to a decline of 2% (earlier a 4.9% growth was projected in the government budget for the current year), and the deficit was increased to 340 billion drams, or 5% of GDP ( previously 2.3%). ($ 1 – AMD 487.03).

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