Figures presented by Tigran Avinyan and the true picture of economy

Deputy Prime Minister Tigran Avinyan has presented several macroeconomic indicators recorded in July of this year in a post on his Facebook page on August 26. According to the Facebook post, a number of sectors recorded growth compared to July 2018.

Avinyan presents indicators of economic activity, industry, services, construction, trade and foreign trade.

It should be noted that Tigran Avinyan presented the preliminary main macroeconomic indicators published by the Statistical Committee, in which, among other comparisons, July 2019 is compared with the same month of last year.

And although the Statistical Committee has submitted the macroeconomic indicators for the first seven months of 2019, the Deputy Prime Minister has only published the data for July. The difference between the two indicators may explain why Tigran Avinyan has particularly presented the data for July.

Note that monthly comparisons of macroeconomic indicators are not common in economics, as there may be displays of activity or inactivity in certain sectors of the economy in certain months, and in order to be as objective as possible, the comparison of macroeconomic indicators should be observed over a wider period of time (a quarter, semester, year).

To obtain a more comprehensive picture, the Fact Investigation Platform presents the comparison of the macroeconomic indicators of July with the data of July of last year, as well as the data of the first seven months of 2019.

They are as follows:

• In July of this year, the index of economic activity increased by 8.1% compared to July of last year, while the growth during the first 7 months was 6-8%.

• Growth of industry in July was 16.1 percent, while in the first 7 months it was only 8.4 percent.
• The growth in the services sector made up 14.9% in July, and the growth for the first 7 months was 15.2%.
• Growth in the construction sector made up 4-1% in July compared to July last year, and it was 4.5% in the first 7 months.
• There was a 9.1% increase in trade in July, while the same indicator increased by 8.9% in the first seven months.
• Exports in July of this year increased by 19.5% compared to July of last year, in the first seven months of 2019 the growth in export was only 3%.
• As for imports, in July of this year the import growth has formed 10% compared to July of last year, and in the first 7 months the growth of import volumes was only 1.9%.

2018 Indicators

By the way, macroeconomic indicators for the first seven months of 2018 were much more “encouraging”. In particular, economic activity, services, construction and foreign trade volumes were growing faster than this year (see the chart for details). Instead, industrial production volumes have significantly increased this year.

In this series, the only exception is perhaps the domestic trade, with an unchanged growth rate of 8-9%.

Thus, although the data presented by Deputy Prime Minister Tigran Avinyan are accurate, they do not reflect the real picture of economic growth. In fact, the growth rates for the first seven months of 2019 are, in large part, slower than those for July.