2014年-世界发展银行全球_Armenia_Economic_Report_Spring_2014___Looking_for_More_Dynamism_36页_976kb

Summary of Armenia Economic Report No.5 Spring 2014

Core Content

This report provides an overview of Armenia's economic and political developments in 2013 and the outlook for 2014. It highlights the challenges and opportunities facing the country in terms of growth, inflation, external accounts, employment, poverty, and structural reforms.

Key Economic Developments

Economic Growth and Domestic Demand

• GDP Growth: Armenia's GDP growth slowed to 3.5% in 2013 from 7.2% in 2012, primarily due to a decline in the construction sector (-11.2% in value-added).
• Sector Contributions: Agriculture and manufacturing showed robust growth, contributing significantly to the economy. The tradable sector (industry and agriculture) accounted for 68% of GDP growth in 2013.
• Construction Impact: Construction activity declined, which offset the growth in other sectors and contributed to a 1.4 percentage point drag on GDP growth.
• GDP Components: In the fourth quarter of 2013, GDP expanded by 5.2% year-on-year, compared to 6.2% in the same period of 2012.

Inflation

• Inflation Trends: Inflation peaked at 9.2% in August 2013 due to energy price increases, but dropped to 5.6% by December 2013, returning to the Central Bank's target range (2.5–5.5%).
• Core Inflation: Core inflation (excluding food and fuel) remained low, suggesting that second-round inflationary effects had not materialized.
• Tariff Impact: Utility tariffs (gas and electricity) increased in July 2013, raising the contribution of services to CPI inflation to 3.1 percentage points.

External Accounts

• Current Account Deficit (CAD): The CAD improved to 9% of GDP in 2013, down from 13% in 2012, driven by higher exports (up 9.2%) and remittances (up 15%).
• FDI Performance: FDI inflows remained low and volatile, with only 3.6% of GDP in the first nine months of 2013, a decline of 20% compared to 2012.
• Debt Structure: Public debt reached $4.6 billion in 2013, with 82% owed to international financial institutions. Eurobond issuance helped improve the debt structure and reduce reliance on domestic T-bills.

Employment and Labor Market

• Unemployment: The unemployment rate dropped to 15.4% in September 2013 from 17.3% in 2012, but structural unemployment remains high.
• Gender Disparities: Women accounted for 72% of job-seekers, but their employment rate was lower than that of men, with a job placement ratio of 0.17 versus 0.26 for men.
• Wage Growth: Private sector wages grew steadily, while public sector wages saw a spike due to end-of-year bonus payments. Average wages in the private sector were 32% higher than in the public sector.

Poverty

• Poverty Trends: Poverty headcount increased from 32.4% in 2012 to an estimated 35.2% in 2013 due to subdued growth and higher utility tariffs.
• Poverty Line Dynamics: Poverty lines increased by 23–24% between 2008 and 2012, outpacing wage growth.
• Social Safety Nets: The pension system was the most significant contributor to poverty reduction, accounting for 11.3 percentage points of poverty reduction in 2012. Social benefits and family benefits contributed 2.6 and 1.2 percentage points, respectively.
• Extreme Poverty: Extreme poverty increased from 2.8% in 2012 to 3.7% in 2013, mainly due to higher food prices.

Key Policy Developments

Fiscal Policy

• Fiscal Deficit: The fiscal deficit declined to 1% of GDP in 2013 from 1.5% in 2012, below the budget target of 2.8%.
• Revenue Sources: Tax revenues increased to 22.8% of GDP in 2013, driven by improved tax administration, expanded tax base, and a one-off license fee from the fourth mobile phone operator.
• Expenditure: Capital spending remained below budget, while priority social spending was maintained.

Monetary and Exchange Rate Policies

• Interest Rates: The Central Bank of Armenia (CBA) lowered the policy rate in response to moderated inflationary pressure.
• Credit Trends: Credit to the private sector expanded, but the rate of non-performing loans also increased.

Structural Reforms

• Business Climate: The government is focusing on structural reforms to improve the business environment and competitiveness.
• Public Administration: Reforms aim to enhance public sector efficiency and resource management, which are expected to support job creation and economic growth.
• Trade Integration: Armenia is working on joining the Russia-led Eurasian Customs Union (ECU), with a roadmap of 262 steps, 150 of which must be completed before official membership.

Outlook and Risks

Economic Outlook

• Growth Projection: The report projects economic growth to recover to 5% in 2014, driven by manufacturing and fixed investment.
• Long-Term Growth: To achieve higher growth (6–8% per year), Armenia needs to accelerate productivity-enhancing structural reforms.
• Job Creation: Job creation is expected to be driven by fostering entrepreneurship and integrating into global supply chains.

Risks

• Construction Sector: Continued weakness in construction is a potential hurdle to growth.
• FDI and Exports: FDI remains depressed, and export growth is not expected to be robust.
• External Shocks: Potential negative total output (ToT) shocks could occur due to energy price increases and low prices for metals and food.

Political Developments

• Pension System: The new funded pension system faced legal challenges and public opposition, with some provisions temporarily suspended by the Constitutional Court.
• Gas Agreement: Opposition parties sought to investigate the gas agreement with Russia, and a government proposal for a commission was introduced but not yet accepted by the opposition.
• Consultative Group Meeting: The government plans to host a Consultative Group Meeting in June 2014 to seek donor support for competitiveness and job creation reforms.

Conclusion

Armenia's economy showed resilience in 2013 despite challenges in construction and inflation. The government's focus on structural reforms, competitiveness, and integration into regional trade blocs is crucial for achieving higher growth and reducing poverty. However, the country faces significant risks, including weak FDI, potential external shocks, and persistent structural unemployment. The report emphasizes the need for continued policy efforts to support sustainable economic development and job creation.