Armenia: Economic Activity Index Shrinks 12.8% in May: Construction Nosedives
In May of this year, compared to the same month in 2019, Armenia's Economic Activity Index (EAI) decreased by 12.8%.
In April 2020, according to Statistical Committee adjusted data, economic activity decreased by 16.3% when compared to April 2019.
The EAI for January-May 2020 slumped 3.9% when compared to the same period in 2019.
Of note is that the decline in some sectors of the economy, such as construction, industry and domestic trade has slowed down since May. The rate of decline in service sector has accelerated.
The impact of the coronavirus crisis on the country’s economic performance was first reflected in the March 2020 data.
Almost all sectors of the economy are in decline. In percentage terms, the deepest slump is in the construction industry. In May of this year, compared to the same month of the previous year, the volume of construction decreased by 27% (23.4 billion drams.)
Construction down 27%
During the first two months of the year, the volume of construction increased, followed by a sharp drop. In January-May of this year, compared to the same period last year, the volume of construction decreased by 23.4%.
Industrial production down 3.9%
In May, the volume of industrial production decreased by 3.9%. This sector started the year with double-digit growth, due to which the volume of industry in January-May, compared to the same period in 2019, increased by 2.4%.
The slump, since March, is linked to exports, which have declined. While the export of raw materials is increasing, other large commodity groups, such as food exports, is decreasing.
Service sector slumps 19.4%
As mentioned, the service sector has taken a big hit In May of this year, compared to the same month in 2019, the volume of services decreased by 19.4%.
The service sector had been growing at a double-digit rate at the start of 2020
During January-May, compared to the same period last year, the decline in services was 4.2%. Hotels, restaurants and travel agencies are among the most impacted.
Trade turnover decline slows
Trade turnover continued to decline in May, but at a much slower rate. In May, compared to the same month of 2019, the domestic trade turnover in Armenia decreased by 18.4%
In April, as compared to the same month of the previous year, trade decreased by 33.1%.
In January-May, compared to the same period in 2019, the decline in trade stood at 10.8%.
The twelve-month consumer inflation rate in Armenia (May 2020 compared to May 2019, was 1.2%.