ECONOMIC ACTIVITY INDEX REDUCES BY 5.4% TO 65.3 IN ARMENIA IN Q3 2008

ARKA
Sep 19, 2008

YEREVAN, September 19. /ARKA/. Economic activity index reduced by 5.4%
down to 65.3 (on the 100-scale) in Armenia in the third quarter against
the same period of last year, the Press Service of the Central Bank
of Armenia (CBA) reported. A 17.7% reduction in economic activity
index was recorded as compared with the second quarter of this year.

Composite index of consumer confidence dropped by 1.6% down to 51.6
in the reporting quarter as compared with the same period of last year
(4.3% increase against the previous quarter).

According to the CBA, business environment index reduced 5.6% down
to 49.3% in annual terms (0.4% increase against the previous quarter).

Despite the fact that two out of three indices showed downward trend
in the third quarter, still they remained stable – over 45.

Economic activity index is calculated based on averaged 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 begi nning 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 833 industry, construction and service organizations and
1,813 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.