2024-02-18 22:46:43
“LUYS” Foundation studied the regular (August 2023) monthly macroeconomic analysis (обзор) published by the Eurasian Development Bank (EDB). These analyzes are intermediate publications between the more comprehensive macroeconomic forecasts and contain statistical information on key macroeconomic indicators of the EDB member countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan.
Below are presented the most noteworthy provisions of the part of the analysis concerning Armenia.
2023 in June, the economic activity index of RA decreased significantly and amounted to 6.8%, compared to 13.7% in May. The monthly data show that the growth in the two sectors that contributed the most to the economic growth of RA recently – services and trade – is slowing down significantly. Perhaps that is the reason why EDB experts in 2023 predict a slowdown in RA economic growth to 7.5%. Moreover, it is noted that this rate will be ensured mainly due to the high rates of economic activity recorded in the first half of the year. Let us remind that in 2022 RA economic growth was 12.6%. According to the forecast, it actually turns out that the period of high rates of economic growth in Armenia is coming to an end.
As a result of the sharp increase in the inflow of people and capital, the Armenian dram has been depreciating against the currencies of trading partner countries since the beginning of the second quarter of 2022. 2022 compared to the beginning of 2023 In July, dram appreciation was against the dollar: 19.8%, against the euro: 21.7%, against the Russian ruble: 32.4%. In terms of the real effective exchange rate, the AMD in 2022 appreciated by 33.6%, and in 2023 June 2022 compared to the beginning – by 40%. Dram appreciation can negatively affect export competitiveness, causing the so-called “Dutch disease” (a situation where the overvaluation of the national currency due to a sharp increase in foreign exchange inflows leads to a decrease in the competitiveness of producers and, ultimately, exports). Sharp increases in consumer incomes increase demand in “non-exportable” sectors (including construction and a significant portion of services and trade), causing over time resources (both material and labor, as well as financial) to gradually shift from “exportable” to “non-exportable” sectors of the economy. areas. As a result, over time, the role of “exportable” sectors in the economy may decrease, and this, as a rule, is an important reason for slowing down economic growth (Magud, Sosa, 2010).
Full analysis at this link.