DECREASE IN GLOBAL DEMAND FOR RAW MATERIALS IMPACTS EMERGING MARKETS AMID WORLD RECESSION
ARKA
September 10, 2009
YEREVAN
YEREVAN, September 10. /ARKA/. Decrease in global demand for raw
materials is the key factor impacting emerging markets amid the world
recession, International Monetary Fund said in its report focused on
the economic crisis in Armenia.
This factor reduced export of Armenia, Azerbaijan, Moldova, Mongolia,
Belarus, Serbia, Georgia, Tajikistan, Kyrgyzstan and Ukraine.
Besides, flows of money transfers and direct foreign investments to
these countries dwindled because of economic decline in Russia and
European countries.
These factors slowed down GDP growth or shrank GDP. ccording to the
IMF report, the fallen global demand for copper and molybdenum drove
copper prices about three times down and molybdenum even more.
As a result, Armenia’s export shrank 47% and direct outside investments
reduced by $250 million.
National Statistical Service of Armenia says Armenia’s foreign
investment inflow dwindled 39.4% in Jan-June 2009, compared with
the same period a year earlier, to $312.2 million (excluding those
loans extended by state-governing agencies and the banking sector),
and direct investments reduced 30.1% to $246.4 million.
The IMF says that money transfer flows to Armenia stopped growing,
and start dwindling instead – from +30% to -30%.
This hobbled construction in the country and affected housing market.
As a result, c onstruction shrank 30% and real estate prices went down.
According to the statistical reports, construction in Armenia totaled
177.9 billion in Jan-July 2009 after reducing 55.5%, compared with
same period of the previous year.
IMF specialists think that mortgage lending shortage didn’t play a
major part in it, since households’ investments in construction were
mainly financed by cash.
IFM experts stress that construction decline had a key part in GDP
reduction.
National Statistical Service of Armenia says the country faced
18.5% economic decline in Jan-July 2009, and GDP totaled AMD 1417.1
billion. ($1 = AMD 377.05).