2024-03-14 11:55:22
“Luys” Foundation studied the 2022 Socio-economic developments of the RA economy in January-September.
– As a result of the escalation of the Russian-Ukrainian conflict, due to the inflow of capital and people to RA, the rate of RA economic activity index (TAC) continues to be high. However, there has been some slowdown in the growth rate in the last two months.
In September 2022, the indicator of economic activity was 14.6%, slowing down by 3.9 percentage points compared to August, and by 4.8 percentage points compared to July.
– The rate of inflation, after somewhat slowing down in the previous months, has started to accelerate again.
The 12-month inflation rate accelerated to 9.9% in September. Already in September, the central bank increased the refinancing rate by 0.5 percentage points, setting it at 10%. By the way, during the current year, the Central Bank raised the refinancing rate several times, but the rate of inflation continued to accelerate. Therefore, it is also necessary to apply other instruments of economic regulation to reduce the rate of inflation.
– The volumes of funds transferred to RA continue to grow at a high rate.
This means that the RA economy continues to receive a large amount of capital, leading to further appreciation of the exchange rate. Under these conditions, the government and the Central Bank should take measures to manage capital flows (for example, implementing interventions or other instruments aimed at sterilizing excess capital in the market) so that their negative effects on the economy are neutralized as much as possible. However, at the same time as the large volumes of cash inflows, a slowdown of the TAC is observed, which should also be the focus of attention of macroeconomic policymakers.
– RA foreign trade is growing at an unprecedentedly high rate.
Both export and import volumes in recent months significantly exceed the indicators of the same months of the previous year. There is a phenomenon of re-exports here due to the sanctions applied to Russia and the opportunities they create. This is further supported by the fact that the main drivers of the domestic economy are not growing to that extent. Therefore, on the one hand, the government should take steps to more effectively tax the businessmen who receive super profits, and on the other hand, it should create attractive conditions for businesses and individuals moved to RA.
– A decline continues to be recorded in the agricultural sector.
2022 According to January-September data, the decline of the agricultural sector was 0.7%. In recent years, there has been a continuous decline in the agricultural sector, while in those years the government’s programs and resources for the development of the sector have been increased. Therefore, the question arises about the effectiveness and targeting of the programs implemented by the government.
– Implementation of the state budget deviated significantly from the plan.
The actual deficit of the state budget has deviated from the plan by about 262.8 billion drams, which is due to both the increased collection of revenues and the underperformance of expenditures. Of course, in conditions of high economic growth, the implementation of fiscal restraint is appropriate, but it should not be implemented by underperforming capital expenditures. Meanwhile, the significant part of the mentioned deviation, 76.5 billion drams, is due to underperformance of capital expenditures.
Full analysis: here