Armenia’s net exports rose at a double-digit rate last year amid faster economic growth resulting from strong performances of the domestic mining and food-processing industries as well as the agricultural sector.
According to the National Statistical Service (NSS), the volume of exports totaled $1.21 billion in January-November 2011, a year-on-year increase of 31 percent. It was still dwarfed by imports that rose by 12.3 percent to $3.75 billion.
The more modest rise in imports was enough to slightly widen the country’s massive trade deficit in absolute terms. But with the Armenian economy on course to grow by more than 4 percent in 2011, the deficit is likely to have fallen as a share of Gross Domestic Product.
The NSS data shows that base metals, ores and ore concentrates generated almost 58 percent of the Armenian export revenue in the eleven-month period. Their exports were up by over 23 percent.
The NSS also reported a 53 percent surge in exports of precious metals and stones and jewelry items that came in at almost $180 million. That reflected upswings in the diamond-processing and gold mining industries.
Armenia also exported $162.6 million worth of prepared foodstuffs, up by 40 percent year on year. Exports of fruit, vegetables, livestock and other agricultural products likewise soared by roughly 34 percent, reflecting robust growth in agriculture reported by the government.
This might explain why exports to Russia, the main market for Armenian agricultural goods sold abroad, jumped by 45 percent to about $200 million.
Even so, the European Union remained Armenia’s number one export market, accounting for nearly half of the January-November exports. EU countries have long been the main buyers of metals, mining output and gem diamonds exported by local manufacturers.
Analysts say a prolonged economic downturn in Europe could therefore have a direct impact on Armenia’s macroeconomic performance already this year. Its possible spillover effects on Russia, the main source of vital remittances from Armenians working abroad, would also have negative implications for the country.
The Armenian authorities have forecast a GDP growth rate of at least 4 percent for 2012. Government officials in Yerevan admit that a deepening financial crisis in the euro zone would call that growth target into question.