On 12 May, the Eurasian Development Bank (EDB) stated in its latest macro review that Armenia is seeing an increase in the economic growth rate, reported arka.am.

“The growth was supported by a year-on-year increase of 4.7% in the construction sector. At the end of the first quarter, consumer and investment demand remained weak. In March, economic activity rose 3.8% on a rebound in growth across all sectors of the economy. The 2021 growth will amount to 3.3% on the back of recovering income from exports, tourism and remittances,” the EDB said. 

According to the official figures of the Armenian National Statistical Committee, the country’s industrial output in the first quarter of 2021 amounted to a little over 470 billion drams, decreasing by 3.9% compared to January-March 2020. However, in March 2021 it was up 9.1% from February 2021 and 3.8% from March 2020. Construction was the only sector that saw growth in January-March 2021 increasing by 4.7% from the same time span of 2020 and amounting to about 49 billion dram. In March 2021 compared to February 2021, the sector's growth was 23.5%, and compared to March 2020 - 10.8%. 

The services (excluding trade) in January-March 2021 amounted to about 404 billion drams, which is 8.1% less than in January-March 2020. At the same time, in March 2021 compared to February 2021, the indicator was up 9.5%, and compared to March 2020 - 0.9%. The agricultural sector in the first three months of 2021 amounted to about 75.5 billion drams, which is 1% less than in January-March 2020. According to statistics, the domestic trade in January-March 2021 amounted to about 664.8 billion drams, having decreased by 5.6% compared to the same period in 2020. At the same time, in March 2021 it was up 9.5% from the previous months of February and by 4.6% when compared to March 2020. 

It should be noted that a week earlier, Armenia’s Central Bank (CBA) raised its main interest rate for the third time in about five months, citing continuing inflationary pressures on the domestic economy. The CBA governor, Martin Galstyan, said the surge reflecting a global trend, coupled with the weaker dram, is the main cause of the higher inflation rate. He admitted that the authorities may well fail to meet their 2021 inflation target. 

Speaking at a news conference, Galstyan was confident that the CBA’s latest decision to raise the minimum cost of borrowing will not slow Armenia’s recovery from a recession caused by the Covid-19 pandemic and aggravated by the Second Karabakh war. In fact, he said, the Armenian economy now seems on course to growth faster than was recently projected by the Central Bank, but he declined to forecast any growth rates.