The National Statistical Service of Armenia has released preliminary data on macroeconomic indicators for January-August 2010. Since the final data are usually precisely concurrent with the preliminary data, this information can be considered an accomplished fact.

So Armenia registered 3.1% GDP growth this January-August as compared with the corresponding period last year. Not a bad figure for the post-crisis year. However, when considering the GDP behavior during this year’s periods compared with last year’s, we can see much lower GDP growth rates. Specifically, with this January compared with last January as well, the GDP was steadily growing January-May this year as compared with the corresponding period last year – from 102.2% up to 108.8%. Later, in comparing this January-June with last January-June, we see a GDP decline down to the aforementioned level.

A considerable decline in the gross agricultural output is a significant factor “incriminated with” slowing down the GDP growth in Armenia. Unfavorable weather conditions destroyed a greater part of the crops. A decline in animal production was registered as well. As a result, this January-August, the gross agricultural output showed an 18% decrease as compared with the corresponding period last year.

Despite the Armenian Government’s efforts to improve the situation in the construction sector, it leaves much to be desired. A “generator” of two-digit GDP growth in the recent past, the construction sector, along with the agricultural one, is now slowing down the GDP growth rates. The construction sector is demonstrating significant changes, namely, a sharp increase in the works funded from the state budget and international credits. On the other hand, the population-funded works showed a decrease.

The industrial sector registered high growth rates – an 11.5% increase in industrial output. The energy sector registered a 17.1% growth. The revived mining industry had its beneficial impact on the industrial output as well as on the processing industry.

This January-August, the retail turnover showed a “token” increase of 0.3% as compared with the corresponding period last year. The paid services sector shows much better figures – a 7.2% increase. In terms of current prices, the increase is particularly marked, as the consumer price index reached 107.7% during this period.

Predictably, the rise in prices for staple goods affected the solvency of households with limited budgets, which, in turn, affected the retail turnover. As regards the services sector, the high figures most likely confirm the fact that the financial crisis hardly affected the wealthy.

This April, Mr. Mark Lewis, Head of the International Monetary Fund (IMF) mission in Armenia, said the IMF had revised its forecasts for the annual GDP growth in Armenia upwards - 1.8% up to about 4%. During the previous period, namely, January-March, 2010, the GDP growth rate was 105.4%. That is, in making its forecast, the IMF cautiously considered the prospective slowdown in the GDP growth in Armenia.

During the following months of this year, when the negative effect on crop production gets minimized, higher GDP growth rates may be expected. So the IMF forecast made this April may well prove to be true.