Armenian Economy

[abass80]

Strong Dram ‘Good For Armenian Growth’

www.armenialiberty.org Wednesday 30, May 2007

By Hovannes Shoghikian and Emil Danielyan

 

The dramatic strengthening of the Armenian dram has been a major factor behind Armenia’s double-digit economic growth recorded in recent years, a senior economist from the International Monetary Fund said on Wednesday.

 

The national currency has gained more than 50 percent in nominal value against the U.S. dollar since the start of its appreciation in late 2003. The process slowed down in the first few months of this year but seems to be again gaining momentum.

 

The Armenian government and Central Bank have attributed the exchange rate fluctuation to a surge in hard currency remittances sent home by hundreds of thousands of Armenians living and working abroad. They also point to the dollar’s overall weakening against other major world currencies.

 

Local manufacturers and economists critical of the government have expressed serious concern at the trend, criticizing the authorities in Yerevan for their refusal to heavily intervene in the foreign-exchange market. They say the stronger dram has hurt Armenian exports and widened the country’s huge trade deficit. Some of the critics have gone as far as to accuse the authorities of “artificially” strengthening the dram to benefit government-connected importers of fuel and other basic commodities.

 

But both the IMF and the World Bank have dismissed the criticism, voicing support for monetary policies pursued by the Armenian Central Bank. David Owen, a senior advisor in the IMF’s Middle East and Central Asia Department, insisted on Wednesday that the strong dram has actually contributed to Armenian growth by suppressing inflation.

 

“We think that the relatively flexible approach to the exchange rate -- allowing more appreciation than elsewhere -- combined with tight fiscal policy have contributed to the very good performance on inflation and to the high growth rate that has been achieved in Armenia,” he told reporters in Yerevan.

 

Owen argued that Armenian exports have grown by an average of 20 percent in the last few years even if they were largely flat in 2006. He said the authorities should help to boost them by implementing more economic reforms and strengthening business competition.

 

According to government data for the first quarter of this year, the exports were up by 25 percent from the same period in 2006, totaling $231 million. But they continued to pale in comparison with imports that jumped by 52 percent to $645 million.

 

The first-quarter official figures also show the Armenian economy growing by 11 percent year on year, putting it on track to expand at a double-digit rate for a sixth consecutive year.

[abass80]

AZG Armenian Daily #101, 31/05/2007

ARMENIA FIRST AMONG NON OIL-EXPORTER STATES BY ECONOMY GROWTH RATE

 

High rates of economic growth is still registered in Caucasus and Central Asia, yet still we shall be aware of possible price pressures and foreign changes, said David Owen, head of IMF Middle East and Central Asia departments. According to the IMF official, the economy growth rate has been higher than 10% in the states of those regions. The economy growth was high both in gas and oil exporter states (Azerbaijan, Kazakhstan, Turkmenstan) as wall as non-exporters (Armenia, Georgia, Kyrgyzstan, Tajikistan, Uzbekistan). The economy growth rate is predicted to exceed 12%.

 

Thus, Armenia is the first in development among the states, which do not export oil or gas. Average economy growth in Armenia for the last 4 years equals 13%, and in the first three months of 2007 this indicator has exceeded 9-10%, provided for by the state budget.

 

Armenia is also on the first place by the progress of consolidation of national currency. Mr. Owen said that due to the flexible policy of the Armenian Central Bank the nominal value of the Armenian national currency consolidated by 25% and the real value – 16,9%. He added that such indicators are positive for the macroeconomic description of Armenia.

 

Nevertheless Owen pointed out that tax collection rates in Armenia still remain low. He suggested that the taxation of agriculture and construction, most swift-developing spheres in Armenia, is ineffective. In order to improve the situation with tax collection in Armenia, the IMF official also emphasized improvement of the administration system and extermination of corruption.

 

By A. Martirosian

[abass80]

AZG Armenian Daily #117, 22/06/2007

 

Economy

 

10.2% ECONOMIC GROWTH IN ARMENIA

 

10.2 % economic growth is recorded in the first five months of this year in Armenia according to the National Statistical Service of RA.

 

In industry - in the real part of the economy nothing is changed; only a trivial rise is recorded. The total industrial production increased by 1.3%, but it has a decrease of 0.3% without electricity.

 

The volume of industrial production, without diamond industry, increased by 7.9 %.

 

The last index is explained by the fall in the volume of diamond industry and at the same time development of other industrial branches.

 

The volume of agricultural production rose by 1.3%, the retail trade circulation - by 11.2%.

 

High growth is recorded in the sphere of services - 16.5%.

 

The rise in construction sphere is 11.6% in contrast to the little growth in this sphere from January to April (6.4%). It is probably conditioned by the end of parliamentary elections in Armenia.

 

Monthly average of wages is 71.000 AMD in the first five months of 2007 - 52.000 AMD in the public and 88.600 AMD in the private sectors

 

As compared with December the prices rose by 4.2% in contrast to the 2.1% rise of prices in January-April.

 

Foreign trade circulation volumes increased by more than 39%.

 

Export of 423.5 M USD is recorded in the first five months of 2007. It means that export increased by 25% as compared with the export of the first five months of last year.

 

Import exceeds 1 billion USD and is 1 billion 112 million USD (an increase of 45.3% as compared with the import of the same period of 2006).

 

Negative foreign trade balance continues to deepen and is 688.5 M USD.

 

The comparison of import-export indexes is a little better if not to take into account the production of diamond.

 

In this case export increased by 43.3%, import - by 56.1%.

 

By Ara Martirosian

[Anonymouse]

Hows the central bank of Armenia and it's printing press self-control? If you want a stable dram, one way to begin is controlling inflation, hopefully.

[abass80]

ARMENIAN DIAMOND-CUTTING SECTOR SUFFERS DRAMATIC SLUMP

 

YEREVAN, JULY 9, ARMENPRESS: Armenia's diamond-cutting industry suffered a major slump in the first five months of this year reporting a 50 percent decline in production volumes from a year ago. The sector, once announced by the government as one of its major priorities, has been suffering decline for the fourth consecutive year after a decade of rapid expansion.

According to Gagik Mkrtchian, head of the department on precious stones and jewelry at the Armenian Ministry of Trade and Economic Development, Armenian diamond-cutting companies produced over the first five months of 2007 20.2 billion Armenian Drams (AMD) worth output, down from almost 38.6 billion from a year ago.

The sale volumes decreased from almost 39 billion AMD in the first five months of 2006 to 19.6 billion Drams in January-May of 2007. Export volumes decreased from 37.5 AMD to 19.3 billion AMD.

Mr. Mkrtchian said one of the major reasons behind this dramatic slump was the shortfall in anticipated deliveries of rough diamonds from Russia. A 2001 Russian-Armenian agreement enabled Armenian companies to process up to 400,000 carats of Russian rough diamonds annually from 2002 through 2004. The quota was subsequently raised to 450,000 carats for 2005 and 2006, but only a fraction of that actually was delivered in 2005 and no raw-diamond arrived in 2006.

Another reason was the lower demand for diamond and golden items in the global market in 2004, but though the global crisis was over, Armenian sector failed to recover. As a result, one of the biggest Armenian companies, Shoghakh, had to close 1000 jobs.

He said the chief manager of the Russian Alrosa company, one of the biggest raw-diamond companies, will arrive in Yerevan soon to negotiate establishment of a joint or Russian company in Armenia.

Mkrtchian said establishment of a Russian diamond-cutting company in Armenia is a way out since "Russia has the raw-material, which it wants to sale, while Armenia has facilities and labor force to process it. "

The bulk of the rough supplies come mainly from Israel and Belgium, explaining why the two countries are among Armenia's leading trading partners.

[abass80]

VIVACEL OWNER TO INVEST IN ARMENIAN MINING INDUSTRY

 

YEREVAN, JULY 12, ARMENPRESS: Pierre Fatouche, a Lebanese businessman and head of Fatouche Group, which owns the controlling stake in Armenia’s second mobile telephone operator-VivaCell- said today his company intends to expand the geography of its operations in Armenia and invest in other economy branches.

Particularly, he said the company is negotiating with Armenian authorities options of investing into the mining industry. Pierre Fatouche cited the ‘very favorable’ Armenian legislation and ‘the political stability’ as the main motives behind his decision to expand operations in Armenia.

“Our company believes in Armenia’s future and trusts its authorities,” he said.

Fatouche Group took hold of telecommunications sector of Nagorno-Karabakh in 2002 through K-Telecom which later opened VivaCell in 2005.

Hussein Rifan, a VivaCell board member, said the company is going to place its shares on Armenia’s stock exchange to make them available to all Armenians. According to him, this will happen in 2008.

Viva Cells chief manager Ralf Yirikian said the company holds 67 percent of Armenia’s mobile phone market.

According to Pierre Fatouche, his company has invested 250 million euros in Armenia.

[abass80]

THE ECONOMIST PREDICTS 10 PERCENT GROWTH FOR ARMENIA

 

YEREVAN, JULY 12, Armenpress: According to a report by the British ‘The Economist’ magazine’s Intelligence Unit, Armenian economy in 2006 grew more than 13 percent. The growth for this year is expected to be about 10 percent.

The report examines economic indices of 28 former Soviet and Eastern Europe republics in 2006 and the expected economic growth this year. Foreign investments in these countries last year amounted to $108 billion, a 40 percent rise from a year before.

The highest economic growth in 2006-34.5 percent- was reported by Azerbaijan. This year its economy is expected to grow 20 percent. The reports says the South Caucasus and Central Asia are the most rapidly developing regions

[abass80]

YEREVAN HOSTS IRAN-ARMENIA ECONOMIC COOPERATION MEETING

 

YEREVAN, JULY 20, ARMENPRESS: Iran’s foreign minister Manouchehr Mottaki has arrived today in Yerevan to co chair the seventh Tehran- Yerevan Joint Economic Cooperation Commission meeting. The Armenian cochairman is energy minister Armen Movsisian.

Mottaki is accompanied by a member of Majlis (parliament) National Security and Foreign Policy Commission Reza Talainik and a number of foreign ministry officials in his one-day visit.

The seventh session of the Commission is discussing a wide scope of bilateral issues relating to energy, agriculture, banking sector, tourism, transport and communication and trade. At the end of the meeting the sides are expected to sign a memorandum of understanding.

Armenian minister Armen Movsisian termed Armenian-Iranian relations as ‘embracing,” saying there is serious potential to boost them.

Manouchehr Mottaki for his part said despite apparent progress in these relations Iranians and Armenians want to feel the results of it. According to him, the positive record of bilateral contacts, the political of both countries’ leadership and the current potential open new horizons for effective partnership.

Mottaki said the two governments are developing an agreement on free trade regime, which would outline a prospect for a long-term cooperation. The Iranian minister also mentioned the plans to build a hydropower plant on the border River of Arax, a new railway to connect both countries and a refinery in Armenia to process Iranian oil.

Mottaki said these projects, when materialized, would give a fresh impetus to cooperation on the regional level and would benefit its peoples.

Armenian-Iranian trade, according to him, rose to $200 million last year from $180 a year before, but he said this number could be much higher. Experts estimate that Armenia and Iran may raise their bilateral trade up to $1 billion.

Edited July 22, 2007 by abass80

[abass80]

ARMENIA REPORTS CONTINUED ROBUST ECONOMIC GROWTH

 

YEREVAN, JULY 23, ARMENPRESS: Armenia’s GDP continued its robust double-digit growth in the first half of this year, according to the national statistical service (Armstat), which said the growth amounted to 945 billion Armenian Drams (AMD) or an 11.2 percent rise from a year ago.

According to the numbers, released today by Armstat, industrial growth, in money terms, rose to 328 billion Drams, or a 1.4 percent higher from a year ago. Without electricity production, the growth was 267 billion Drams and without diamond cutting industry it rose 8.2 percent to 325.2 billion AMD.

Electricity production in the first six month amounted to 3. 06 billion kilowatt /hours and agricultural GDP was 127 billion Drams, or 1.9 percent down from a year ago.

The biggest growth rate-17.2 percent-was again reported in construction sector, which saw a 172 billion AMD investments.

Armstat said retail trade rose 11.4 percent to 364.5 billion AMD, while services to population grew 18 percent to 245 billion AMD.

Population income was said to grow to 854 billion AMD and expenses to 839 billion AMD. Population income and expenses grew respectively 25.2 and 23.7 percent.

Armstat also said average wage rose 20. 5 percent to 71,344 AMD ($210), with 52,500 AMD in public sector and 89,000 in private sector. Armenia’s foreign trade rose meantime 36.5 percent to $1.9 billion.

[AK-47]

Canadian company looking for natural gas in Armenia

 

Canadian company Transeuro Energy will start exploring a natural gas field in the Armavir region of Armenia from August 22, reports the news agency Regnum.

 

The preliminary project will last three to four months at a cost of around USD 10 million. If initial test drills are encouraging the company will increase its investment.

 

Current geological data suggests significant natural gas reserves in the field, but technical feasibility studies are needed before a major extraction operation is commissioned.

 

A discovery of large reserves could change the geopolitical map of the South Caucasus, experts predict.

 

 

Source: http://www.messenger.com.ge/issues/1422_au.../eco_1422_2.htm

[gamavor]

ARMENIA'S FOREIGN TRADE TURNOVER IN JANUARY-JULY OF 2007 INCREASED BY 37,0%

 

Mediamax

Aug 20 2007

Armenia

 

Yerevan, August 20 /Mediamax/. The foreign trade turnover of Armenia

in January-July of 2007 totaled 800.5bln drams or $ 2262.9mln, having

increased by 37,0% as compared to the same period of 2006.

 

As the press service of the National Statistical Service of Armenia

told Mediamax today, the export volume during the accounting period

made 222.9bln drams or $631.1mln, and the import volume totaled

577.6bln drams or $1631.8mln.

 

The deficit of the foreign trade balance in January-July of 2007

stood at 354.7bln drams or $1000.7mln.

 

http://groong.usc.edu/news/msg199511.html

 

 

[abass80]

AZG Armenian Daily #153, 25/08/2007

 

Armenia-Russia relations

 

PUTIN PROMISES $1,5 BILLION INVESTMENTS

 

On August 23, Russian and Armenian presidents Vladimir Putin and Robert Kocharian met in Sochi (Russia). Vladimir Putin expressed his content with development of Armenian-Russian bilateral relations: increase in commodity turnover and allied cooperation in political sphere, "Novosti Armenia" agency informed.

 

Russian President V. Putin assured of $1,5 billion Russian investments in the Armenian economy in 2007.

 

In his turn, Robert Kocharian mentioned that Armenian-Russian relations develop in all directions: there is evident increase in investments, commodity turnover, military-technical and political cooperation.

 

There is an evident development process of mutual relations, according to the Armenian president, and the Armenian side expresses its perfect willingness to contribute to that process.

 

It’s worth to mention that this kind of meetings between the Russian and Armenian presidents at the Russian president’s residence "Bocharov Ruchey" in Sochi have become a tradition for the two presidents. As many politicians mention, those meetings aim to regulate bilateral relations of the two states: to give a new impetus and quality to them.

 

It’s the forth meeting of the presidents Putin and Kocharian this year; the second in Sochi.

 

It’s worth to mention, that if before we could say that the political issues were preliminary in the Armenian-Russian relations, today the situation has changed. The economic factor is a dominant issue in Armenia-Russia bilateral relations: over the first six months of 2007 the trade turnover between the two countries increased by 70% and at the end of the year it will probably exceed $500 mln.

 

Russia has become the Number One country with its investments in the Armenian economy ("Gasprom", "Vimpelcom", "Rusal" and other giant organizations).

 

On the other hand, there are serious problems in political relations of these two states: the mass media of the two countries write about it from time to time.

 

If the Russian politicians and experts do not hide their dissatisfaction at the Armenia-NATO developing relations, then we are not satisfied with the military relations of our military ally with Azerbaijan and Turkey.

 

Anyway, according to the Russian media one of the main issues of the Kocharian-Putin meeting is the military-political relations between the two states. According to the analysts, being a member of Collective Security Treaty Organization (CSTO), Armenia wants to deepen the mutual military relations with Russia. It means that these meeting will take place with the motto "Deepening of bilateral military relations".

 

In the background of the new developments in the region, the Armenian-Russian bilateral military relations have gained a new meaning and come from the interests of our country’s national security.

 

In this context, we can perceive the logic of the Armenia-NATO deepening relations.

 

The meeting of the two presidents has also a symbolic meaning, as it takes place close to the date of the 10th anniversary of the Armenian-Russian friendship and cooperation strategic agreement (on August 29, 1997). This agreement became the basis of the Armenian-Russian wide-ranging military cooperation.

 

By Armen Manvelian

 

© Copyright AZG

[AK-47]

http://www.reuters.com/article/worldNews/i...178343320070826

 

3 page article by Reuters on the boost of Artsakh's economy thanks to patriotic Armenian diaspora.

Edited August 27, 2007 by AK-47

[hosank]

true true..west side armeniaa

 

[abass80]

ARMENIA’S TRADE WITH TURKEY RISES 23 PERCENT

 

YEREVAN, AUGUST 31, ARMENPRESS: Armenia’s foreign trade in January-July of 2008 rose to $2.263 billion. Exports rose 21 percent from a year ago to $631 million, while imports rose 44.5 percent to $1.632 billion.

The National Statistical Service said the trade deficit rose beyond $1 billion.

It said also 32 percent of trade fell on former Soviet republics. The biggest share of 15 percent or $331 million, was with Russia. Ukraine was the second biggest trade partner among former Soviet republics with $144 million.

The trade with CIS countries rose 55 percent.

Trade with EU members rose 34 percent to almost 39 percent of all foreign trade. The biggest trade partner was Germany-$210 million or 10 percent, Belgium was second with $127 million or 6 percent.

Armenia’s trade with Turkey with which it has no diplomatic relations, rose 23 percent to $58 million. Share of trade with Turkey made 2.6 percent, it was 5 percent with the USA and 4 percent with China.

[abass80]

INVESTMENTS IN JANUARY-JULY RISE TO $245 MILLION

 

YEREVAN, AUGUST 31, ARMENPRESS: Investments in Armenia’s real sector economy in January-July of 2008 rose 37 percent from a year ago to almost $245 million, Armenia’s statistical service said today.

It said the figure does not include investments in the state-run agencies and banking sectors. The amount of direct investments in economy was said to rise 77 percent to $153 million.

According to the statistical service, 27 percent of all investments or almost $41 million were proceeds generated from the sale of enterprises.

Lebanon with $84 million was number 1 investor, followed by Russia with $74 million. Investments from Argentina rose to $24 million.

Almost 48 percent of foreign investments and 57 percent of direct investments into the real sector of economy went to communications sector, 9 percent of direct investments went to air transport sector and 8 percent to construction sector.

[abass80]

ARMENIA’S FOREIGN DEBT RISES TO $1.266 BILLION

 

YEREVAN, SEPTEMBER 3, ARMENPRESS: Armenia’s foreign debt rose to $1.266 billion as of June 30. According to Armenian Statistical Service, it grew 9.3 percent from a year ago.

Armenia owes 72 percent of its debt, or nearly $910 million, to the World Bank. It rose 12 percent from a year ago.

Another 12.4 percent or $157 million are owed to the International Monetary Fund (IMF), 4 percent or $51 million to the International Fund for Agricultural Development (IFAD).

Armenia also owes $4.6 million (0.4%) and $ 2.9 million (0.2 %) to OPEC Foundation and European Bank for Reconstruction and Development (EBRD) respectively.

Armenia owes $93 million (7.4 %) to Germany and $39.5 million (3.1%) to the USA.

[abass80]

ARMENIA POSTS 13.6 PERCENT GDP GROWTH IN JANUARY-AUGUST

 

YEREVAN, SEPTEMBER 20, ARMENPRESS: Armenia’s economic growth in January-August grew 13.6 percent amounting, in terms of money, to 1.6 trillion Drams, according the chief of the National Statistical Service Stepan Mnatsakanian.

He said today this was an unprecedented GDP growth in just eight months. Armenia’s industrial output rose to 446.4 billion Drams, a 1.7 percent growth from a year ago. Power production not counted the growth was 369 billion Drams.

Armenia’s power plants produced in the reported time 4.03 billion kilowatt/hours electricity, 1.6 percent down from a year ago. Despite late spring and early summer flooding agricultural GDP grew 7.6 percent to 329 billion Drams.

Construction accounted for the biggest growth-19.6 percent. A total of 328 billion Drams were invested in this sector.

Retail trade grew 11 percent to 510 billion Drams. Services to population rose 20 percent to 335 billion Drams. Population income rose to 1.2 trillion Drams and expenditures to 1.6 billion Drams. The inflation rate was 3.9 percent.

By the end of August there were 82,000 officially registered unemployed people, down 8 percent from a year ago.

Average wages rose 21.5 percent to 73.630 Drams ( $216). Wages in public salary rose to 54,000 Drams and to 92,000 in public sector.

Armenia’s foreign trade rose nearly 40 percent to $2.660 billion. Exports rose 23 percent to $734 million and imports rose 47 percent to $1.926 billion.