After last year’s crisis, the global economy is recovering at a rapid pace, while economic activity in Armenia is declining. In January-September 2021, the index of economic activity in Armenia comprised 4.4%, while in January-August the indicator was at the level of 4.9%, that is, it dropped by 0.5%.
This proves once again that the economic indicators of this year are inertial, and are not linked to the socio-economic policy of the country. Taking into account the economic downturn in 2020 (7.4%), Armenia was unable to come close to even the pre-crisis indicators. The decline in the agricultural sector at the level of 1.5% is particularly alarming. It is no coincidence that food prices rose by 15.8% in September of this year. Industrial growth rates in Armenia are declining and now amount to 0.7%.
The production of cigarettes, which accounts for a significant share in the processing industry, continues to decline. In September, the growth rate in the construction sector dropped by 0.9% compared with the previous month, amounting to 6.4%. This is due to deceleration of implementation of state capital construction projects and reduction of real investments.
In the context of continuous inflation, domestic trade is declining, which indicates decline in the standard of living of the population. Even a significant increase in remittances from abroad can’t offset the costs of inflation. In such conditions, the 6.5% economic growth projected by the government for the year 2021 is unrealistic.