Armenia's Economy Grew in First Half of 2007

Armenia's economy is on the rise yet again!

The growth of Armenia’s GDP in January-May of 2007 totaled 10.2%, as compared to the same period of 2006.

The average monthly salary in Armenia in January-May of 2007 increased by 18.0%, as compared to the same period of 2006, thus making 71016 drams.

That's almost $207 dollars a month, which compares favorably with the $186 a month in 2006, converted with today's currency exchange rates. Of course, this is assuming zero inflation and zero numbers fudging, both of which have to be taken into account with all purposely incomplete government statistics.

Source: Banks.am

Armenian Taxes in 2006 in the Billions...of AMD!

Every country has to have a hated agency. Of course, in the United States it's the Internal Revenue Service, charged with making your life a living hell full of numbers, exceptions, and lots of paper! But don't worry: Armenians aren't exactly green with envy, because they've got the same at home!

The RA Taxation Service collected a total of AMD 220.683bln (about $605 million) taxes instead of the planned AMD 220.417bln...

He said that tax revenues actually increased by AMD 47bln ($128 million) compared to 2005. Tsolakyan stressed that a steady increase in tax revenues have been recorded in Armenia over the last few years.

Tsolakyan stressed that the RA taxation Service focused its attention on construction, mining industry, gas and public catering.

So if you run a prostitution ring, you get off without a hitch.

Source: Arka

Armenia's Unemployment Level Drops to 7.2%

Looks like Armenia's growing economy is leaving fewer people without a job:

By the end of 2006 December unemployment level in Armenia dropped to 7.2 percent from 7.7 percent 12 months before. However, it rose in some provinces, particularly in the southernmost Syunik and Lori in the northeast.

...last year employment centers across the country found jobs for 8,268 people and another 10,250 were offered temporary jobs. Almost half of people who found jobs last year were in the capital city Yerevan. Mrs. Harutunian said there were vacancies for workers in Yerevan remaining unfilled for months. In regions there is a demand for doctors and school teachers.

The unemployment allowance has risen from 3,900 drams [$10.60] in 2003 to 12,000 Drams. [$32.70]

It would be interesting to see just how much unemployment increased around Armenia. For your convenience, I've pulled unemployment numbers from some countries to compare with:

Turkey: 10.2% (source)
Germany: 9.6% (source)
United States: 4.5% (source)

Article Source: ArmenPress

Armenian Jewelers Hold 10% of the World Market

Armenians are among the greatest jewelers in the world, and I say that with objectivity!

...Gagik Abrahamian, president of the International Association of Armenian Jewelers (IAAJ) and chairman of board of directors of Armenian Diamond Factory and Armenian Jewelry Factory said the International Association of Armenian Jewelers, established 10 years ago, has now representations in the USA, Europe, the Middle East, Asia and Armenia. 'The main objective of the Association is to use the available resources and experience of Diaspora Armenian jewelers to the benefit of development of this sector in Armenia.'

When it comes time to buy jewelry, whether an engagement ring or otherwise, consider Armenian brands. There are a lot of them and they put out some great stuff. I can tell you that I certainly will!

Source: ArmenPress

Use of Dollar in Armenia Declines 23%

Armenia seems to have adopted the dram as its currency of use. That sounds silly, but until a little while ago, the dollar was in heavy circulation.

Use of U.S. dollar instead of Armenian national currency in Armenia has reduced more than 23% over 2006 to 30% by late December.

Cash in circulation grew 46.5% and deposits in Armenian drams 67%. Deposits in foreign currency were only 2.3% greater than earlier.

One has to wonder whether that is a direct result of the exchange rates.

Source: Arka

Armenia Predicts 2007 GDP of 9%

Since you are reading this blog daily - and there is a punishment if you're not - you already know how Armenia did economically in 2006. However, Armenia is working on its 2007 numbers - or at least predicting them.

According to the Minutes of the Board meetings of the Central Bank of Armenia (CBA) on the 2007 monetary and credit policy directions, the capital construction growth rates are expected to decrease with the agriculture and service sphere growth rates remaining the same. Certain rise is expected in the production growth rates, along with lower growth rates for domestic demand and higher export increase rates.

The 2007 state budget envisages AMD 2 trn 322 bln worth nominal GDP, with the real GDP growth planned at 9% and the inflation at 4%.

It will be interesting to see how the year pans out.

Source: Arka

Robert Kocharyan Urges Fight Against Shadow Economy

From the horse's mouth:

The country's taxation and customs services do not show due eagerness in struggling against the "shady" economy. Kocharyan pointed out the impropriety of reminding the services of the large volume of "black" economy and their duties. Although certain progress has been recorded in the sphere, the process is far from being satisfactory, Kocharyan said.

The country's president and the government will have higher requirements towards the work of the taxation and customs services in 2007, Kocharyan said.

Oh, by the way, the term "shadow economy" is used to describe any business that is illegal, in terms of under-reporting taxes, illegally importing goods without paying fees, and so on.

One has to wonder how much Kocharyan has at stake!

Source: Arka

All Sorts of Loans for All Sorts of People!

I've always said that Armenia needs Western-style banks to truly rise above the others. You know, credit cards, 30-year mortgages, business loans, etc. Looks like a certain bank is now experimenting with just that on a respectable scale.

"BTA Investbank" (Armenia) opened a centre of retail crediting...

The centre will receive and examine individual applications for loaning.
In particular, applications for mortgage credits, repair loans, car-purchase loans, and consumer credits will be accepted.

Kosanov added that clients will be given overdrafts by means of local ArCa cards.

By the way, I should mention that the fellow in the picture is Rasul Kosanov, executive director of the bank. Doesn't sound Armenian, does it? Of course not: the bank is half owned by one of the largest banks in Kazakhstan!

Source: Arka

Russia Remains Armenia's Most Important Economic Friend

Russia is important to Armenia in almost every possible way, which is no wonder it is the closest of all the former states.

Russia remains Armenia's major trade and economic partner of Armenia.
According to the 2006 annual report of Armenia's Minister of Foreign Affairs Vardan Oskanyan, Armenian-Russian commodity turnover totaled $376.9mln in January-November 2006; $300mln in 2005.

And that is your economic news for the day!

Source: Arka

Armenia's $1,000,000,000 Trade Deficit

Armenia now enjoys the same problem as the United States: trade deficit. A trade deficit is when a country imports more items than it exports, meaning more goods are brought in than they are taken out of the country to be sold elsewhere.

Armenia’s external trade deficit reached a new record-high level last year, surpassing the $1 billion mark due to flat exports and a stagnant manufacturing sector...

Official figures cited by the Regnum news agency show the country’s net imports soaring by almost 21 percent to $1.95 billion in the first eleven months of 2006. Armenian exports stood at just $895 million, 0.3 percent up from the same period in 2005.

The government has repeatedly blamed the negative manufacturing trend on a continuing downturn in the global trade in refined diamonds, one of Armenia’s main export items.

The Armenian Central Bank says the dram has been bolstered by a similarly steep rise in cash remittances sent home by hundreds of thousands of Armenians working abroad.

Blame whomever you want: I blame the lack of a diversified economy. What we need is a good manufacturing sector!

Source: ArmeniaLiberty

Statistics of Armenia's Economy in 2006

GDP - Gross Domestic Product: $6.3 billion
Economic Growth: 13.2%
Construction Growth: 36.3%
Transport/Communications Growth: 14.8%
Agriculture Growth: 0.2%
Industrial Growth: -1.2%
Trade & Public Catering: 11.7%
Other Growth: 17.1%

What this shows is that there is very much a construction boom going on in Armenia and as we would expect, traditional sectors like industrial and agriculture are not doing that well. All in all, Armenia had a great year in 2006. Here's to 2007!

Source: Arka

Armenia's New Years Resolutions

2006 was a good year economically for Armenia. Here's what they expect in 2007:

Armenia has closed the economic year with positive indices, says a message of RA Premier Andranik Margaryan. The Government managed to fully execute its state budget commitments on schedule, and minimum 13% economic growth was recorded at the end of 2006, the message says. The Government is simultaneously increasing social expenses, and last year was not an exception.

The RA Premier stressed that a considerable rise in wages, pensions, allowances, allocation to the education, public health and other sectors is budgeted in 2007. However, numerous problems, such as unequal distribution of the gross domestic product, social polarization, more consistent struggle against corruption, enhancement of efficiency of reforms, still remain. Margaryan pointed out that the Government will make every effort to resolve the problems.

"The political year is of no less importance. We are closing it without shocks."

No political shocks? That's for the May 2007 Elections!

Source: ARKA

Armeconombank, Lufthansa, Hertz Introduce a Mastercard

One measure of economic progress is to see just how many major companies are considering Armenia a safe place in which to invest. So far, so good.

Armeconombank OJSC together with Lufthansa German Airways and Hertz car leasing company introduce a unique offer in the card market of Armenia, MasterCard Standard Co-branded cards. The cardholders of MasterCard Standard Co-branded cards will benefit from unprecedented opportunity to rebate not only in Armenia, but in around 150 countries throughout the Globe.

Armeconombank MasterCard holders will be granted a discount of 5% and an opportunity to haul a 10kg additional cargo in case if they purchase air tickets from Lufthansa German Airways. Armeconombank cardholders, who lease cars from Hertz company will be granted a 15% discount in, and a 10% discount outside Armenia.

Its noteworthy that the new product allows the cardholders to benefit from discounts in more than 150 countries of the World.

That all sounds great, but what's with these bank names? Try saying Armeconombank three times, really fast. Bet you can't.

Source: Huliq

Armenia's Nature: Open for Tourists!

This was an inevitability. Armenia's economy is based very strongly on tourism, so why not exploit whatever is left of our unspoilt nature for the almighty dollar?

In 2007, Armenia's nature reserves will be opened for tourists, RA Minister of Nature Protection Vardan Aivazyan told reporters.
He said that ecotourism infrastructures will be formed and tourist routes elaborated.

The Minister pointed out that the ecosystem of nature reserves will not be affected.

Hundreds of thousands of careless tourists creeping their way through beautiful, vulnerable Armenian nature: what could possibly go wrong?

Source: Arka

Armenia: World Leader in Natural Gas Vehicles

Armenians have always been ready to adapt to new technology as they require it - and this is no different.

The transport ministry estimates that between 20 and 30 percent of vehicles in Armenia run on gas. That compares to just over 3 percent in the Netherlands, a front-runner in natural gas-powered transport, according to the World LP Gas Association.

In landlocked Armenia, it is not concerns over climate change or global warming that are driving growth in natural gas-powered vehicles. Instead, it is harsh necessity - and an unresolved war with Azerbaijan, its neighbor to the east.

"Petrol is getting more expensive," said Transport and Communications Minister Andranik Manukian. "(Natural) gas ... has not gone up by that much so it is preferable to use it."

Back in the late 1980s, my father had his Niva converted to natural gas. The car worked as normal, except it had one enormous red bottle - or more like a barrel - where the trunk space should have been. Oh, and it almost usually had a faint gas smell coming from it. Of course, gas doesn't smell, but an aroma is added so you could smell if you were in trouble and get out. Needless to say, that smell didn't matter then and it doens't matter now, even despite the fact that a majority of Armenians smoke regularly. However, I've heard - and they may just be urban legends - of some buses on natural gas exploding into flames in Yerevan and injuring or possibly even killing people nearby.

I encourage you to read the full article linked below.

Source: Topix

Armenia's GDP to Grow 13.5% in 2006

It's no surprise to anyone in Armenia that it is experiencing rapid growth. As long as the administration facilitates that growth, we seem to be on a rather good path, at least economically. By the way, GDP is Gross Domestic Product, which indicates the total annual value of all goods and service produced.

GDP growth will amount to no less than 13.5 percent in Armenia in 2006, ARKA News Agency quoted the republic's Economy Minister Karen Tchshmarityan as saying. In January-November, Armenia's GDP rose 13.2 percent, he said. The minister attributed this advance to an increase in the country's industrial production.

Investment in Armenia's real economy, excluding state-backed credit, will exceed $400m in 2006, which is a 20-25 percent increase on the year before. Investment went chiefly to such sectors as transport, telecommunications, and the mining and metallurgy industries, Tchshmarityan stressed.

During the latest 3 years there were 25000 subjects of small and medium enterprises were established in the republic, more than 11000 of which in 2006. As a result, there appeared 16 000 new jobs during the current year.

For comparison, the GDP of the United States grew 3.2% in 2005. That means Armenia's economy is still nascent and not yet mature.

Source: RBC and Banks.am

Foreign Investments in Armenia Increase 32%

Well, we wanted some good news, and here it is!

Armenian national statistical service (Armstat) said the volume of foreign investments in the country's real economy sector in January-September of 2006 (not counting investments in the state management and banking sectors) rose almost 32 percent from a year ago to $297.5 million.

Armstat said the volume of direct investments was $149.4 million, 8 percent up from a year ago. It said investments from Greece declined 34 percent to $44.8 million, investments from Russia declined 5 percent to $34.4 million. Instead investments from Argentine grew 9 times to $58 million, 2 times from Lebanon to $56.2 million.

Investments from the USA and Great Britain made $17.6 and $21.1 million respectively, up 42 and 15 percent. Investments came also for the first time from China, Liechtenstein and Finland. Almost 34 percent of foreign and 23.7 percent of direct investments went to the communications sector, 23 percent of direct investments went to the mining and 16.4 percent to aviation sectors.

As long as these numbers don't hide a certain truth of fudging, this really is good news for Armenia. As reported earlier, this most likely means more Armenian assets are going to foreign companies/governments, which essentially means Armenains can't control their future. International conflicts and other such economic disturbances can possibly play havoc on Armenia's economy.

But since we're still growing rapidly, maybe this "initial wave" of investments - some 15 years in the making - is a good thing.

Source: ArmenPress.