Armenia's Economic Pulse

[HyeSocialist]

Re: Armenia's Economic Pulse

Moody's downgrades Armenia's government bond rating to B1, changes the outlook to stable from negative

https://www.moodys.com/research/Mood...the--PR_345220

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After decades of plunder by the oligarchs, Armenia is about to get rocked by market forces.

[Haykakan]

Re: Armenia's Economic Pulse

Armenian developers’ Shadowmatic game named best in two categories of International Mobile Gaming Awards







Armenian developers’ Shadowmatic game named best in two categories of International Mobile Gaming Awards


YEREVAN, March 17. /ARKA/. Shadowmatic, a game of Armenian developers, has been recognized as winner in two categories of International Mobile Gaming Awards (IMGA) contest in San Francisco, Bagrat Dabaghyan, technical director of Triada Studio, the developer of Shadowmatic, reported on his Facebook page.

The game is the winner in the categories The Best Technical Achievement and People’s Choice.

Dabaghyan thanked all fans and players who voted for Shadowmatic.

The game has been included in the list of the best AppStore applications in 2015. Shadowmatic has been recognized best in Japan, China, Russia, India and other countries, and in Russia’s territory it has won the title The Game of the Year and has been atop the list.

Shadowmatic was launched on January 15, 2015 and additional opportunities appeared in the game since then - Arcade Mode and new levels for children.

Shadowmatic has won popularity. The application is available in 14 languages, including Armenian.

The game has won Apple Design Awards and also ArmNet Awards 2015 contest in two nominations – ‘Design and Comfort/Mobile Application’ and ‘Innovations’.

In November 2015, it became available also on Apple TV.
IMGA contest is in its 12th year. It is one of the world best platforms for presentation of mobile applications.
Mobile solutions for iPhone, Android and other systems are presented at the contest every year. --0----



17:40 17.03.2016

[Zeytun]

Re: Armenia's Economic Pulse

Armenia's Monthly Economic Developments
February 29, 2016

Highlights

GDP growth slowed to 3.0 percent in 2015 in light of the weakening external conditions. The resulting fiscal deficit, of 4 percent of GDP, was financed mainly by external borrowing.Changes in the 2016 expenditure composition refer to the increased allocation for economic sectors in a form of subsides.The Central Bank lowered the policy rate from 10.25 percent at the beginning of the year.Overall the banking sector remained sound in 2015, but total lending declined by 3.1 percent.
The current account position improved due to the sharp contraction in imports. GDP growth slowed to 3.0 percent in 2015 in light of the weakening external conditions, in particular Russia’s recession. Despite the reduced exports to and remittances from Russia, growth was stronger than expected due to one-off factors including a good agriculture harvest and the opening of a new copper mine. In 2016, growth is projected to remain sluggish at 2.2 percent due to continued recession in Russia and structural weaknesses. The economic activity index increased to 5.5 percent in January 2016 (y-o-y) supported by the tradable sector. The relative boost in economic activity, including the agri-export expansion, is explained by the base effect in January 2015 and needs to be maintained for a few more months before suggesting any adjustments in projections.

The government introduced a fiscal stimulus in 2015 to support weakening economic activity, widening the fiscal deficit. The stimulus consisted of a combination of tax relief and increased spending in infrastructure investment, social protection and subsidized lending. The resulting fiscal deficit, of 4 percent of GDP (compared with 2 percent in 2014), was financed mainly by external borrowing, including Eurobonds and budget support from ACF/EEU and WB, leading to a build-up of government debt to 48 percent of GDP.

The approved 2016 Budget includes revenue-raising measures and modest expenditure cuts to accommodate fiscal consolidation. Some of the tax policy changes pertaining to excise tax base and rate increases introduced in the fall of 2015 will positively affect the revenue collection however the overall tax to GDP ratio is expected to decline by 1 percentage point. There are no other major tax policy and tax administration changes envisaged by the 2016 state budget as the government is leading a major endeavor to finalize and submit to Parliament a unified tax code which is assumed to enter into force in 2018 and bring about significant policy, procedural and administrative changes. Public expenditures are planned to reduce by 1.5 percentage point of GDP, to achieve a target deficit of 3.5 percent of GDP. Changes in the 2016 expenditure composition refer to the increased allocation for economic sectors in a form of subsides, increased debt service spending which will be accommodated by the envisaged cuts in public procurements for goods and services. Actual revenue collection in January 2016 was lower than a year ago, reflecting the trend of a continued decline in imports. The fiscal pressure observed last year may be experienced again in 2016 if the January trend continues.

Monetary policy was tight during the first half of 2015 but eased in the latter half, as inflationary pressures receded. A good agriculture harvest, lower international food prices and weak domestic demand resulted in the average annual inflation of minus 0.1 percent in 2015 – well below the CBA’s target range of 4±1.5 percent inflation. The Central Bank lowered the policy rate from 10.25 percent at the beginning of the year to 8.75 percent by the end of 2015. Inflation remained muted in January 2016 with 0.4 percent reduction of the over consumer price index helped by about 4 percent decline in food prices.

Overall the banking sector remained sound in 2015. However non-performing loans soared from 3.7 percent at the beginning of 2015 to above 9 percent towards the end of the year. Higher dollarization and currency mismatches in the balance sheet pose risks to banking sector stability and profitability. Total lending declined in 2015 by 3.1 percent with FX-denominated loans suffering the largest contraction reflecting expectation of further dram appreciation. Commercial banks deposited excess forex at the CBA, which contributed to an increase in gross reserves by US$282 million over 2015. 2016 is expected to be a challenging year for the banking sector as the new requirement for minimum capital will enter into force on January 1, 2017.

The current account position improved due to the sharp contraction in imports. Imports fell by 26.5 percent in 2015 and by 22 percent yoy in January 2016. Despite the decline in exports to Russia, there was only a marginal deterioration in exports of 3.9 percent in 2015, because of higher trade with China and Middle East. Overall exports contracted by 27.1 percent to the EEU – reflecting weak demand in Eurasia following the commodity price slump and the transactions costs associated with transitioning to the customs union’s procedures and requirements – and by 5.2 percent to the EU in 2015 compared to the previous year. The improvement in the trade balance compensated for the fall in remittances. Net remittances declined by 35.8 percent in 2015 (in USD, y-o-y,), driven by a 42.2 percent decline of net remittances from Russia. The improved current account position eased pressures on the dram, and the Central Bank reduced forex intervention sharply in the second half of the year, resulting in an increase in international reserves increased to US$1.77 billion at end-2015, compared with US$1.35 billion in January 2015. The trade deficit improved further in January 2016 as exports increased by 5.6 percent while imports contracted further by 22 percent.

http://www.worldbank.org/en/country/armenia/brief/monthly-economic-developments

[Mher]

Re: Armenia's Economic Pulse

Armenia’s state external debt grows by 14.1 percent in 2015

YEREVAN, February 29. / ARKA /. Armenia’s state external debt increased by 14.1% in 2015 to $4.317.3 billion, the National Statistical Service (NSS) said.

According to NSS data, the country’s external debt has grown by 3.9 times over the past 5 years and by 5 times over the last 15 years. The highest growth was reported in 2009, when Armenia's GDP fell by 14.1%. In 2009, the external debt surged by 88.1% when compared to the previous year.

A decline in external debt over the past 15 years was recorded only twice- in 2005 it fell by 7.1% and in 2014 by 2.9%. The increase in external debt in 2015 was aided by attraction of credits from international financial institutions, auction of government Eurobonds and loans attracted by commercial banks.
According to NSS, the debt to the World Bank accounted for 38.2% of the total external debt. In 2015 it increased by 2.6% to $1.650.5 billion. Of that amount $1.139.7 billion were owed to the International Development Association (IDA) and $510.8 million to the International Bank for Reconstruction and Development (IBRD).

The debt to EBRD in 2015 amounted to $18.8 million, the debt to the European Investment Bank -.to $128 million, the debt to the International Fund for Agricultural Development – to $61.2 million, the debt to OPEC Fund- to $40.4 million, the debt to the Asian Development Bank – to $396 5 million, the debt to IMF- to - $414.3 million, the debt to EU –to $71 million and the debt to the Eurasian Development bank – to $100 million.

The government also owed $241.5 million to Japanese JICA and $189.9 million to German KfW. The debt to the USA stood at $23.5 million, that to France – at $20 million, the debt to Russia – at $7.7 million, the debt to Abu Dhabi Development Foundation stood at $6.3 million and the debt to China’s Export-Import – at $20.37 million.

The amount of loans provided by foreign commercial banks were worth in the reporting period approximately $23.1 million. (a 42.4% growth). The external debt generated by purchase of Eurobonds by non-residents grew last year by 36.8% to $902 million and the debt generated by purchase of government bonds by non-residents surged by 64% to approximately $1.54 million.

In 2015 Armenia’s overall public debt amounted to $5.071 billion, growing by 14% or $629.5 million from the previous year. The domestic debt in the end of December stood at $761.4 million, having increased by 16% from the year before and by 1.3% from 2015 November. According to 2016 budget, the country’s public debt is expected to grow to $5.569 billion and make 49.4% of GDP, up from 48.3% in 2015.

http://arka.am/en/news/business/armenia_s_state_external_debt_grows_by_14_1_percent_in_2015/

So the debt has grown from 4.405 billion dollars, or about 38.1% of GDP (11.64 Billion USD), to 5.071 billion dollars, or 42.3% of GDP (12.04 Billion USD). Most of that was from the 500 or 600 million euro loan Armenia took at the beginning of the year to shore up foreign exchange reserves. Almost none of that has actually been spent. The reserves have simply grown from $1.2 Billion to $1.7 Billion. So repayment is not an issue, unless the dram needs further shoring up.

[Mher]

Re: Armenia's Economic Pulse

It's possible that cheaper energy prices and less rubles coming into Armenia due remittances dropping could be part of this? An increase in Armenian goods to Russia due to Turkey being out of the picture? Whatever the case, man...Armenia definitely has the capabilities to boost itself to middle income country. Mediating trade between Russia and Iran can alone accomplish that.

As you can see from the above article regarding gas prices, gas prices haven't been lowered yet. But you are largely correct when it comes to the rest. Because the Ruble much greater depreciation compared to the dram's depreciation, Russian goods are much cheaper when counted in dollars, so importing the same things ends up amounting to less. Also, with the depreciation of the dram, and exports from other countries becoming more expensive when counted in drams, so it very possible that Armenia's are choosing to go for the local alternative. As far as remittance, they have their own category and don't affect import/export numbers, but less remittance might be forcing less superfluous import purchases. Like you said, unless one of us holds a PhD in economics or work in the Armenian economic ministry, we can't be sure what's causing it. But whatever it is, hope it continues.

[Mher]

Re: Armenia's Economic Pulse

It's ridiculous that we're paying the same price as when gas was almost three times more expensive

Russia may cut natural gas price for Armenia by 20 percent

YEREVAN, February 25. /ARKA/. Russia may cut the price of natural gas for Armenia by 15-20%, Konstantin Simonov, the head of the National Energy Security Fund of Russia said at a round table dedicated to the Caucasus Eurasian integration process.

"This is my personal forecast. Though I believe that the current gas price for Armenia is already cheap. Nevertheless, due to a drop in world gas prices, the difference between the prices at which Russia is providing gas to Armenia and other countries has decreased," he said.

Armenian Deputy Minister of Energy and Natural Resources Areg Galstyan, in turn, noted that Armenia is interested in the speedy completion of negotiations on the reduction of Russian gas prices.

"The reduction of the gas price for Armenia would become a powerful stimulus for the Armenian economy, including heavy industry, which is important in terms of GDP growth," said Galstyan.

In mid-January, Armenia’s authorities asked their Russian counterparts to lower the price for the natural gas imported to Armenia. The sides are said to be continuing the talks on this issue.

Russia’s Gazprom that supplies about 80 percent of Armenia’s gas, lowered the tariff from $190 to $165 per thousand cubic meters less than a year ago, however, the move did not translate into corresponding retail price reductions for Armenian households and corporate consumers. In 2015, Armenia imported 1.9 billion cubic meters of Russian gas, by 6.8% less than in 2014. -0-

http://arka.am/en/news/economy/russia_may_cut_natural_gas_price_for_armenia_by_20_percent/

[Mher]

Re: Armenia's Economic Pulse

Newly-appointed economy minister opposes mandatory funded pension system

YEREVAN, February 25. /ARKA/. The newly-appointed economy minister Artsvik Minasyan from the Armenian Revolutionary Federation/Dashnaktsutyun party has reconfirmed today his opposition to the mandatory funded pension system.

"I still oppose the mandatory funded pension system. And it is not just my personal opinion, it is the opinion of my party,' he said after a Cabinet meeting today in response to a question from reporters about his stance on the funded pension system.

The new pension system took force on January 1, 2014 but was suspended shortly afterwards after being found contradicting to the Constitution. It requires that all Armenian citizens born after 1973 pay social security taxes equivalent to 5 percent of their monthly wages, which will be matched and doubled by the government.

Due to a series of protests on January 24, 2014 Armenia’s Constitutional Court suspended Article 76 of the pension law, which provided for penalties for failed or delayed pension tax payments, and the third paragraph of Article 86, which obligated employed citizens to choose a pension fund.

On April 2, the Constitutional Court ruled that some provisions of the new pension law were contradicting to the Constitution and voided them instructing the government to make changes. Eventually the government made it mandatory for public sector employees only. The law will become mandatory for private sector too after 2017. -0

http://arka.am/en/news/society/newly_appointed_economy_minister_opposes_mandatory_funded_pension_system/

[HyeSocialist]

Re: Armenia's Economic Pulse

Armenia's trade balance keep trending in the right direction. In 2015 we went from about a 3:1 trade deficit in previous years to about a 2:1. Now I don't know enough about economics to understand the larger implications of the causes behind this trend which seems to be mainly fueled by the regional economic downturn, and the sustainability of this trend if the regional economy stabilizes, but on the surface it seems to be a positive thing

Armenia’s foreign trade in January shrank by 13.8% to about $ 242.4 million

Armenia’s foreign trade in January shrank by 13.8% to about $ 242.4 million
YEREVAN, February 22. /ARKA/. Armenia’s foreign trade in January 2016 shrank by 13.8% from the same month of 2015 to about $242.4 million, the National Statistical Service (NSS) said today.

According to NSS, exports increased by 5.6% to $89.2 million, while imports slashed by 22.2% to about $153.2 million. The resulting negative trade balance in January was $64 million ($ 1 - 495.53 drams). -0-

http://arka.am/en/news/economy/armen...242_4_million/

It's possible that cheaper energy prices and less rubles coming into Armenia due remittances dropping could be part of this? An increase in Armenian goods to Russia due to Turkey being out of the picture? Whatever the case, man...Armenia definitely has the capabilities to boost itself to middle income country. Mediating trade between Russia and Iran can alone accomplish that.

[Haykakan]

Re: Armenia's Economic Pulse

VIENNA THE WORLD'S BEST CITY TO LIVE IN; YEREVAN RANKED 182ND

14:48, 23 Feb 2016
Siranush Ghazanchyan

Photo: Getty Images

Vienna is the world's best city to live in; Baghdad is the worst,
and London, Paris and New York do not even make it into the top 35,
according to international research into quality of life.

German-speaking cities dominate the rankings in the 18th Mercer Quality
of Life study, with Vienna joined by Zurich, Munich, Dusseldorf and
Frankfurt in the top seven.

Paris has tumbled down the league, falling 10 places to 37th, just
ahead of London at 39th, almost entirely because of the city's
vulnerability to terrorist attacks.

US cities perform relatively poorly in the study, largely because of
issues around personal safety and crime. The highest ranking city in
the US is San Francisco, at 28th; Boston is 34th. Canadian cities,
led by Toronto, far outrank their US rivals in the table.

Armenia's capital Yerevan is ranked 182nd among 230 cities. The list
includes two Russian cities -Moscow and Saint Petersburg, ranked
167th and 174th respectively. Georgia's capital Tbilisi is 188th,
Azerbaijan's Baku is placed 197th. Istanbul (122nd) is the only
Turkish city included in the ranking.

The capital cities of Armenia's partners in the Eurasian Economic Union
are placed as follows: Minsk - 190th, Almaty - 176th, Bishkek - 210th.

The study examined social and economic conditions, health, education,
housing and the environment, and is used by big companies to assess
where they should locate and how much they should pay staff.

https://urldefense.proofpoint.com/v2/url?u=https-3A__www.imercer.com_content_mobility_quality-2Dof-2Dliving-2Dcity-2Drankings.html-23list&d=CwIFaQ&c=clK7kQUTWtAVEOVIgvi0NU5BOUHhpN0H8p7CSfnc_gI&r=LVw5zH6C4LHpVQcGEdVcrQ&m=O0OybCBBGuUTTQda9G1nLbWIm9I_AEVCjOxzcQ9GWCM&s=D7fAnvZzuxOKPSF248XTaJw-1cvL3BuQNrGHRiWtBm8&e=

https://urldefense.proofpoint.com/v2/url?u=http-3A__www.armradio.am_en_2016_02_23_vienna-2Dthe-2Dworlds-2Dbest-2Dcity-2Dto-2Dlive-2Din-2Dyerevan-2Dranked-2D182nd_&d=CwIFaQ&c=clK7kQUTWtAVEOVIgvi0NU5BOUHhpN0H8p7CSfnc_gI&r=LVw5zH6C4LHpVQcGEdVcrQ&m=O0OybCBBGuUTTQda9G1nLbWIm9I_AEVCjOxzcQ9GWCM&s=Yvu4j8blN9wl744VIna58xcx9yQ-tM4Qu3Cpu9hskTw&e=

[Mher]

Re: Armenia's Economic Pulse

Armenia's trade balance keep trending in the right direction. In 2015 we went from about a 3:1 trade deficit in previous years to about a 2:1. Now I don't know enough about economics to understand the larger implications of the causes behind this trend which seems to be mainly fueled by the regional economic downturn, and the sustainability of this trend if the regional economy stabilizes, but on the surface it seems to be a positive thing

Armenia’s foreign trade in January shrank by 13.8% to about $ 242.4 million

Armenia’s foreign trade in January shrank by 13.8% to about $ 242.4 million
YEREVAN, February 22. /ARKA/. Armenia’s foreign trade in January 2016 shrank by 13.8% from the same month of 2015 to about $242.4 million, the National Statistical Service (NSS) said today.

According to NSS, exports increased by 5.6% to $89.2 million, while imports slashed by 22.2% to about $153.2 million. The resulting negative trade balance in January was $64 million ($ 1 - 495.53 drams). -0-

http://arka.am/en/news/economy/armenia_s_foreign_trade_in_january_shrank_by_13_8_to_about_242_4_million/