Armenian Economic News‏

THE ECONOMIST: ARMENIA HAS BEGUN TO RECOVER FROM ECONOMIC CRISIS
ARMENPRESS
MAY 12, 2010
YEREVAN

YEREVAN, MAY 12, ARMENPRESS: Armenia has begun to recover from its
first serious economic crisis since the early 1990s. Data from the
National Statistical Service (NSS) reveal that real GDP rose by 5.5%
year on year in the first quarter of 2010. Growth was supported by
a strong performance in industrial output, which was boosted by the
rise in international prices for base metals.

An increase in remittance payments from Armenians working abroad has
also been a contributing factor to the economic recovery. The recovery
progressively accelerated during this period, with the year-on-year
rate of economic growth standing at 2.4% in January and 3.1% in
January-February. These indicators led the government in late March
to revise its full-year growth forecast for 2010 from 1.2% to 1.8%.

Nonetheless, government officials stated that growth could exceed
their expectations.

With real GDP declining by 14.4% year on year in 2009, Armenia was
among the countries hardest hit by the global recession. The recession
reflected the increasing vulnerability of the Armenian economy, which
had grown overly dependent on construction, workers' remittances
and higher global metal prices. In early April the president,
Serzh Sargsyan, said that the economy was currently in a recovery
phase. The finance minister, Tigran Davtian, expects the recovery to
be sluggish at least until the second half of 2011. In late February
the head of the World Bank office in the Armenian capital, Yerevan,
Aristomene Varoudakis, likewise cautioned that only the acute phase
of the crisis is over and that the economy would probably remain
weak for a prolonged period. The World Bank forecasts that real GDP
in Armenia will expand by 2% in 2010.

The jewellery sector is also showing signs of a revival, particularly
the diamond-processing industry. NSS data show that local firms
produced 14,775 carats of gem diamonds in the first quarter of 2010,
up by 55.3% year on year. According to the Ministry of Economy, 60,000
carats of rough diamonds were imported in January-February 2010,
six times more than during the year-earlier period, and close to the
70,600 carats imported in the whole of 2009.

Industrial output was weighed down by a contraction of almost 10%
year on year in energy production in the first quarter. Natural gas
consumption, which accounted for just over one-fifth of the total,
fell by 15.6% year on year. An unusually warm winter and decreased
purchasing power of the population appear to have been the main factors
behind the drop. The energy sector's performance in 2010 will also be
affected by a 37.5% rise in the price of natural gas for households
that took effect on April 1st.

In the first quarter growth was also supported by the apparent end to
the sharp decline in construction-which had been a main driving force
behind the country's pre-crisis robust growth. The sector's output in
the first quarter was essentially flat compared with the year-earlier
period. However, this marks a significant improvement compared with
2009 as a whole, when construction contracted by 36.4%. Signalling
the potential for a further rebound in the sector later in the year,
production of construction materials soared by more than one-half,
to Dram8.3bn, in the first quarter, according to the NSS.

ARMENIAN EMIGRATION: TRICKLE MAY BECOME A FLOOD
by Giorgi Lomsadze
EurasiaNet.org
May 13 2010
NY

With the Armenian economy's winter of discontent far from over,
a second surge of mass emigration may be afoot, the United Nations
Development Programme warns.

As many as 300,000 Armenians could leave for the greener pastures
of Russia, Europe and the United States, if quality of life within
Armenia does not improve quickly, the UNDP report concluded. Armenian
men who work abroad and send home their earnings -- a significant part
of the Armenian economy - might well choose to import their families,
if the government does not manage to create more jobs, stability and
democracy, the report said.

Armenians first started leaving their homeland en masse during the
topsy-turvy years of the Soviet Union's breakup.


How can Armenia equal with Africa by tax collection level?
To convince Armenian citizens of big business transparency is an
overwhelming task.

The RA State Revenue Committee overfulfilled the tax collection plan
in the first quarter of 2010. More than AMD 126.7bn entered the
national budget instead of the planned AMD 116.9bn, thus ensuring a
19% growth as compared with the same period of 2009.

April 12, 2010
PanARMENIAN.Net -

IMF resident representative in Armenia Guillermo Tolosa has darkened
such `bright' statistical data, declaring that the ratio of tax
collection level to GDP in Armenia is lower than in African countries.
The IMF representative regretted to say that RA government's measures
aiming to improve the tax administration system did not give a
desirable result and some reforms proceeded slower than expected. In
particular, IMF shared the concern of the authorities on the low level
of big business tax collection and advised the RA State Revenue
Committee controlling big taxpayers to work more actively.

Armenian Prime Minister Tigran Sargsyan said that he fully agrees to
the criticism that the government does not properly control big
business, which also impedes development of small and medium-sized
businesses in the country. He also voiced anxiety that the burden of
tax commitments fell on SMBs and not big business and confessed that a
number of measures undertaken by the government for two years have not
produced satisfactory results.

As of April 1, 2010, the RA Ministry of Finance has already introduced
the list of 285 large taxpayers, whose annual profit exceeded AMD1bn
in 2009. The conclusion of the independent external audit on those
taxpayers' activities will be published for the first time in this
connection. The publication will enable the public to watch the
activities of these economic entities as well as activities of
country's state structures `so that no minister or MP will not have
his own business.'

As a matter of fact, no minister or MP runs his own business in
Armenia, but their `second aunts' own big companies. So, to convince
Armenian citizens of big business transparency is an overwhelming
task.

Hripsime Hayrapetyan / PanARMENIAN News

ARMENIAN CENTRAL BANK EXPECTS MEDIAN WAGE TO GROW BY 7%
ARKA
May 12, 2010
YEREVAN

Armenian Central Bank said it expects the national median nominal
wage to increase this year by 7%. The bank said in its Money and
Credit Policy Program for the second quarter of 2010 that it expects
the median nominal wage to grow also a little in the first quarter
of 2011, to be backed by increasing wages both in public and private
sectors on the back of recovering economy.

The Central Bank has also forecast a 1.7% unemployment rise for 2010
to 7.3%, by 0.4% higher than in 2009. But in the first quarter of
2011 the unemployment rate is expected to fall to 7%.

The Central Bank said also developments in labor market will result in
inflationary pressure on consumer market (about 0.4%) because expenses
on a unit of labor force will rise by 2%. Simultaneously inflationary
pressure on the labor market will lower. In the first quarter of
2011 inflationary pressure on labor market will rise by 0.7% since
the average wage will be growing faster than the labor productivity.
 
 
ARMENIA HAS 523,000 PENSIONERS
ARKA
May 12, 2010
YEREVAN

On January 1, 2010 some 522,835 Armenian citizens were pensioners,
according to the latest government data. The National Statistical
Service said 9,100 of them were military pensioners and the rest,
518,000 were social and insurance pensioners.

According to official figures, an average pension in Armenia is 24,500
Drams or $63.1. Yerevan has the largest number of pensioners- 180,700.

The least has Vayots Dzor-10,300. Armenia's overall population is a
little over 3.2 million.

In late March the government approved more than ten percent increases
in pensions and poverty benefits to cushion the effects of a 37.5%
rise in the price of natural gas for Armenian households which took
effect on April 1. Monthly benefits to low-income households increased
by 15 percent from May 1. The pension was raised by 11%. It will come
into effect from November 1.