Armenia’s economic recovery continued to accelerate in March, resulting in a first-quarter GDP growth of 5.5 percent, according to latest government statistics.
The year-on-year growth rate reported by the National Statistical Service (NSS) is up from the January-February level of 3.1 percent. It also beat the expectations of the Armenian government and Central Bank.
The government forecast last November that the Armenian economy, which contracted by 14.4 percent in 2009, will expand by only 1.2 percent this year. It revised the full-year forecast upwards to 1.8 percent late last month. The International Monetary Fund and the World Bank have come up with similar macroeconomic projections.
The latest NSS data show that economic growth in the first quarter of 2010 was primarily driven by a more than 10 percent rise in industrial output. It in turn resulted, in large measure, from soaring international prices of copper and other non-ferrous metals, Armenia’s most important export item. That seems to explain why first-quarter Armenian exports shot up by 60 percent to almost $200 million.
Services other than retail trade were another major contributor to the growth, with output in that sector rising by 6.2 percent during the same period. Significantly, the official figures also suggest that a sharp decline in the domestic construction industry, once a key engine of growth, all but stopped in March. First-quarter output in the construction sector was virtually flat.
The macroeconomic figures will give more weight to government claims that Armenia is emerging from its first major economic downturn since the early 1990s. President Serzh Sarkisian said earlier this month that the Armenian economy is currently “in a recovery phase.”
“I think this will be our first post-crisis year,” Gagik Minasian, the pro-government chairman of the Armenian parliament committee on finance and budgetary affairs, told RFE/RL’s Armenian service on Wednesday.
Minasian attributed the accelerating growth to anti-crisis measures that have been taken by the Armenian authorities and supported by the IMF and the World Bank. But he also acknowledged that “the entire world is emerging from the recession.”
Vartan Bostanjian, the deputy chairman of the parliament committee on economic affairs, was more cautious in assessing what he called “positive economic trends.” “An economic crisis is a complex phenomenon and it can’t be overcome so easily,” he said. “Its consequences linger on for some time.”
“In general, the first quarter of the year is not the most characteristic one,” Bostanjian told RFE/RL’s Armenian service.
Vahagn Khachatrian, an economist affiliated with the opposition Armenian National Congress, downplayed the macroeconomic data, saying that it was mainly conditioned by increased metal prices. Khachatrian also claimed that the government has failed to act on his promises to diversify the economy and thereby make it more resilient to future crises.