ROBUST ARMENIAN GDP GROWTH PERSISTS IN MAY
Venla Sipila
World Markets Research Centre
Global Insight
June 24, 2008
According to the latest data from the Armenian National Statistical
Service, the country’s GDP increased by 9.8% year-on-year (y/y) over
the January-May period, Black Sea Press reports. Thus, the figures
signal some further acceleration in economic growth in May, as annual
growth in January-April had earlier been reported at 9.3%. Indeed,
month-on-month (m/m) growth in May was reported at a very strong rate
of 34%. Construction remained a key driving force in the economy in
January-May, with activity in the sector growing by 14.9% y/y over
the five-month period. Meanwhile, the service sector (excluding
trade) expanded by 10.6% y/y, while retail trade increased by 4.3%
y/y. Conversely, industrial output continued to perform modestly,
contracting by 0.4% y/y in the first five months of the year, while
electricity generation rose by 2.3% y/y. Finally, agricultural
production increased by a modest rate of 1.9% y/y in January-May,
but surged by over 39% in May compared to April.
Significance:After six consecutive years of double-digit growth rates,
the pace of economic expansion so far this year has surprised with
its persistent strength. The latest data also signal some renewed
acceleration in retail trade growth in May, suggesting continued
strong growth of private demand. In light of the latest data, the
official growth target of 10% specified this year’s budget may be
at least nearly within reach. However, overheating concerns remain
relevant too, as the continued very rapid growth of domestic demand
does not make the current task of controlling leaping inflation rates
any easier, nor does it help in curbing the wide trade gap.