By Emil Danielyan
The Armenian economy grew by 7.4 percent in the first quarter of this year on the back of strong industrial performance, according to government data.
The GDP growth, which has averaged 5.5 percent since 1994, continued under a low inflation, with the consumer price index up by just under 1 percent from the December level.
Figures released by the National Statistics Service on Saturday show an unprecedented 56 percent surge in Armenian exports which has resulted in a record-low trade deficit. Net exports thus reached $120 million, while imports rose by 14.4 percent to $204.4 million during the period in question.
Analyst believe that refined diamonds accounted for much of the export gain. The diamond-cutting sector, one of the most important in the Armenian economy, went through a major downturn last year. But with global demand in the precious stones again picking up, local diamond firms now appear to be on the mend.
The first-quarter growth was largely driven by an almost 14 percent increase in Armenian industrial output. The growth rate would have been higher had it not been for a 3.2 percent fall in power generation, the official data show. Also contributing to the overall GDP increase was a nearly 12 percent growth in the construction sector.
The official rate of unemployment, the number one problem facing most Armenians, stood below 10 percent as of late March. But the real rate is by far higher as the government figures do not take account of the huge hidden unemployment and employment in Armenia.
Economists and some government officials agree that seven consecutive years of economic growth have not been accompanied by a commensurate job creation and that only a small percentage of the population has felt its benefits. The huge income disparity, they say, in turn results from widespread tax evasion by the rich as well as government corruption.
Still, President Robert Kocharian said earlier this month that the growth will translate into 25,000 new jobs this year. He said 2002 will see “very interesting” economic indicators.