Thursday, 2 August 2012
2012 Seven Months’ Macroeconomic Performance On Record
Prime Minister Tigran Sargsyan – Good afternoon, dear colleagues. Before proceeding to the agenda, we will review Armenia’s macroeconomic performance for the first seven months of 2012. To this end, I give the floor to Minister of Finance Vache Gabrielyan.
Minister of Finance Vache Gabrielyan - Thank you, Mr. Prime Minister. The National Statistics Service has summed up the macroeconomic indicators for January-July, 2012. It should be noted that we have already the corrected estimates of economic activity indicators which are quite encouraging.
As a whole, economic activity is estimated at 7.8 percent as compared with January-July 2011. What is most gratifying is that the level of industrial output is 113, with an increase of 13 percent, and agriculture has risen by 8.1 percent. Still low is the dynamics of construction, but we have an encouraging development, that is private construction is starting to grow along with corresponding services leading to 12 percent aggregate increase.
Account taken of the logic of growth, we can conclude that 6-6.5% is the overall growth index. Of course, there may be some adjustments considering that this is the estimate of the Ministry of Finance, not that of the National Statistics Service. Especially important is the fact that industry has grown, too, along with a sharp increase stated in plant growing.
Inflation was 2.2 percent in January-July. Prices fell 1.5 percent in July, while we used to have a 2-3 percent price reduction in July-August.
In general, the index of January-July is rather low as compared to other years. We can state with confidence that this year’s inflation target is quite feasible and if not below the proposed threshold, than definitely very close to the target. Considering that the figures are currently flirting with the 4 % target plus/minus 1.5 %, we estimate that annual inflation will come below the mark of 4 %, especially if there no adverse developments in international markets.
As regards the budget estimate, by the month of July welfare payments and taxes have been settled to a total amount of AMD 80.5bn against the planned 79.5 billion. AMD 489.6 billion has been collected in budget revenue over the first seven months of this year, amounting to 76.7% of the 638.2 billion planned for 9 months of 2012. Taxes and duties stand at AMD 475 billion, making some 75.9 percent of the 9-month program.
As for expenditures, they have amounted to AMD 503.9 billion, 73.1 % of the 9-month target of 689 billion. I am providing the 3-month and 9-month indices due to the fact that our planning is a quarterly one.
The indicators suggest that strong with such good dynamics, we can be more than confident of continued economic growth and enhanced revenue collection.
