Armenian foreign trade shrank by a fifth in the first half of 2015, the latest data released by the country’s National Statistical Service shows. This is the first time Armenia’s trade falls after the 2009 recession when its economy declined by more than 14 percent.
In the mentioned period Armenia’s trade with other countries, including Russia, Kazakhstan and Belarus, with which it formed the Eurasian Economic Union at the beginning of this year, totaled $2.186 billion, which is by 20.6 percent less than in January-June 2014.
When Armenia’s economy went into recession in 2009 the foreign trade decline in the first half of the year was 31.5 percent compared with the same period of 2008.
Moreover, the statistics also shows that for the first time since the 2009 crisis domestic trade in Armenia also fell this year.In January-June 2015, the decline was 5.1 percent compared with the same period in 2014.
The Armenian government collected by 13.5 percent less taxes (just over $1 billion) during the period under review than in the corresponding period last year. It is also the biggest decline since the 2009 crisis.
Finally, remittances wired to Armenia by individuals, which is also a crucial for the Armenian economy, showed a further decline by 28.4 percent (some $682 million) as compared with January-June 2014. This decrease is also the biggest since 2009.
Armenian Prime Minister Hovik Abrahamian, meanwhile, struck an optimistic note about the prospects of economic growth this year when he talked to media while visiting Armenia’s second largest city of Gyumri last weekend.
Abrahamian, in particular, said that overall the economy expanded by 4.5 percent in January-June and that it showed growth in all sectors except for commodity turnover. He also stressed that Armenia’s economy was on track to expand by 4.1 percent in 2015, which is the government’s target for the year.
At the same time, the head of the Armenian government downplayed the forecasts of leading international financial institutions that predict considerably lower growth or no growth at all for the Armenian economy in 2015. Abrahamian also reiterated that Armenia’s economy will be more active in the second half of the year.
Economist Vahagn Khachatrian, who is affiliated with the opposition Armenian National Congress party, is, however, skeptical about government assurances on the economic growth prospects. He says there are a number of key indicators that show the true state of the country’s economy. The first indicator, according to him, is the decline in the collection of taxes. “Another such indicator is the real estate market, and if we summarize the data for the same first six months, we shall see that there is also a decline in the number of transactions and reduced prices in dollars by 15 percent per square meter [of property],” Khachatrian said.
“The decrease in trade, private remittances is also crucial. And all this means that Armenia’s economy is in crisis,” the pro-opposition economist concluded.