Economic Activity Index 65.6 In Armenia In 1q 2008

ECONOMIC ACTIVITY INDEX 65.6 IN ARMENIA IN 1Q 2008

ARKA
March 19, 2008

YEREVAN, March 19. /ARKA/. Economic activity index in Armenia reduced
7.9% down to 65.6 in Armenia in 1st quarter of 2008, which is a 20.6%
increase as compared with the 4th quarter of 2007, the Central Bank
of Armenia (CBA) reported.

Composite index of consumer confidence has been 53.5 for the period
under review, which is a 0.9% reduction against the same period
of last year and a 10.3% increase as compared with 4th quarter of
2007previous period.

According to the CBA, business environment index increased 7.8%
up to 50.5 (on 100-point scale) as compared with the 4th quarter of
2007. Against the same period of last year, the indicator reduced
12.6%.

According to the CBA, economic activity index is calculated based on
averaging estimates and expectations of respondents on production
output, production orders and expected changes in production
reserves. At the same time, consumer confidence index is the
arithmetical mean of responses of households on their expectations
on income, expenditures and employment level, as well as on their
attitude toward the current economic situation.

Business environment index is determined through averaging estimates
of organizations on changes in general economic condition and risks.

Since the beginning of 2005 the CBA has been conducting quarterly
polls of non-financial, financial organizations and households to
assess change in the current economic situation as compared with the
previous period, to assess economic expectations of the entities and
households and to calculate and publish composite economic indices.

Random 845 industry, construction and service organizations and
1,789 households were studied in Yerevan and all 10 regions of
Armenia. The polls were conducted through the Internet, telephone,
mail and fax. Indices of economic activity and consumer confidence were
calculated on a 100-point scale (over 50 – high activity, below 50 –
poor activity, 50points – unchanged status) based on the results of
the polls.