Armenia’s GDP growth slows down because decline in construction and slow growth in mining sector

23.10.2013 19:32
Armenia’s GDP growth slows down because decline in construction and slow growth in mining sector

YEREVAN, October 23. /ARKA/. Armenia’s GDP grew 3.5% in Jan-June 2013, compared with the same period a year before, showing a slower growth than in Jan-June 2012, compared with the previous year.  This slowdown was due to a decline in the construction sector and a slow growth rate in the mining sector.

Added value growth in the industry showed a 1.3-percent year-on-year growth in the first half of this year mainly due to growth in mining and processing segments of the industry.

The agriculture sector accounted for a 3.5-percent year-on-year growth in Jan-Jun 2013, which was slower than that of the Jan-June 2012 growth, compared with the same period of 2011, because the 2012 growth was very high.

Added value in construction dropped 19.6% mostly due to considerable contraction of the construction carried out at the account of organizations. Construction paid from international loans declined as well.
Instead, population-paid construction grew.

Added value in the services sector accounted for a good, 7.9-percent year-on-year growth in Jan-Jun 2013 thanks to growth in trade and other services.

According to the central bank’s report, private consumption grew 3.4% in Jan-June 2013, compared with the same period a year earlier, while private investments shrank 10%.

Some slowdown in consumption growth, compared with the Jan-June 2012 year-on-year growth, was due to the gradual dwindling of economic impacts of the 2012 fast growth in the agriculture sector and a slower growth in lending to farmers.

Public sector’s consumption grew 9.2%, while government investments reduced 1.9%.
Armenia’s lending market accounted for a 5.2-percent growth, compared with the end of 2012, which showed some slowdown that can be explained by the lending market saturation that will probably force banks to introduce new instruments.

The regulator says in its report that growth was recorded in lending to all the segments of the economy but industry, where loan portfolio shrank 8.7%.

The share of nonperforming loans in the total loan portfolio grew 2.1% to 5.6%.

The surveys conducted by the central bank showed that business activity index went 0.8% down in Jan-June 2013, compared with the second quarter of this year, but rose 7.4%, compared with the same period a year before. The highest business activity index was recorded in the services sector –it rose 9.9%, compared with the second quarter.

Optimistic expectations were seen in all the segments of the economy.
In the 2013 government budget, GDP growth in Armenia is projected at 6.2%. ----0---


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