Armenian GDP Growth Continues Despite Lagging Agriculture

High growth levels in Armenia's industrial sector have compensated for a poor harvest season.

YEREVAN (RFE/RL)—Armenia’s economic growth this year continues despite a slump in agricultural production, RFE/RL’s Armenian Service reports.

Growth in Armenia for the first six months of 2010 was 6.7 percent according to government statistics released on July 20. The reported growth rate was down from the 8.8 percent registered by the National Statistics Service through May.

The country’s economic recovery this year had progressively accelerated since January when the gross domestic product (GDP) was reported to have risen by 2.2 percent year-on-year.

The Statistics Service data show that first-half growth was dragged down by a 13 percent drop in agricultural output, which generated almost 10 percent of GDP during the six-month period.

Much of the loss recorded in June is accorded to an early March cold snap and an unusually rainy spring that inflicted heavy damage on Armenian farm output, which greatly increased the price of fruits and vegetables.

Yet the agricultural crisis was more than offset by a 12.3 percent rise in industrial output, the single-largest contributor to first-half GDP. That was, in turn, driven by rallying international prices of copper and other nonferrous metals, Armenia’s most important exports.

Growth in other major sectors of the economy, notably services and construction, was more modest. The construction sector, for example, expanded by 4.1 percent after more than a year of sharp declines—the main reason the economy contracted by 14.2 percent in 2009.

Finance Minister Tigran Davtian told journalists last month that economic growth is a “stable trend.” He predicted a full-year growth rate of at least seven percent.

Vartan Bostanjian, a deputy chairman of the Armenian parliament’s committee on economic issues, sounded a more cautious note on July 20. “There is a positive trend showing that we are not in a situation where we were last year,” he said.

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2 Comments

  1. ashot yerkat said:

    It is sad and unfortunate that Asbarez has chosen that particular photo in conjunction with Armenia’s GDP, showing what looks like a farmer drying tomatos in the sun, on the ground, in his slippers, his feet touching the foodstuff. It is appaling, to say the least. Is that the best picture you people have, to show the world, when you report about our (Gross) Domestic Products? Shame on you, Asbarez, our enemies would have treated us better. Is that all you can show about our industrial savvy? Couldn’t you show a factory building, a lab, a farm combine? I do not comprehende your mentality! Amot! Amot!

  2. Arman said:

    The problem I see with this report is the absents of dates. It is well know that Armenia is a four seasons country. In winter it is above 0 degree and agricultural production is under 0 GDP. In the summer the temperature is above 0 degree, thus the agricultural production is over 0 GDP. This not a science racket, every human with a little bran knows this. I think the GDP of Armenia is can be explained by the picture above not by numbers. Numbers are for countries that have industries but unfortunately Armenia is just a service country.

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