External Trade Concentration Level has Decreased by Countries and Grown by Commodities

In 2015, Armenia’s external trade concentration level by countries has decreased, because of 4.7 pp. lower share of trade partner Russia in the structure of exports. The latter has diminished the sensitivity of Armenia’s economy to unfavorable developments in Russia. Taking into account the continuous low level of external demand, the export volumes to Russia and the Euro Union have declined by 26.7% and 5.2%, respectively.

This was mentioned in Financial Stability Report 2015 by the Central Bank of Armenia (CBA).

The shortening of the current account deficit, amidst the decrease of money transfers of individuals, was mainly due to significant amelioration of account deficits of goods and services. The improvement of trade deficit was a result of growth of goods exports amidst decrease of imports in real terms.

Given the Central bank of Armenia assessment, the real exports of goods and services increased by 13.7%, according to the balance of payments, though the international prices of raw material commodities decreased. The net imports declined by 7.8%. The dollar value of imports of goods and services has decreased by 20.3%, while the export has fallen by 5.4%, due to fall in export prices.

By structure of imports, a decrease in import volumes was recorded in all goods items except in instruments and appliances. Moreover, the most declines of imports were reported in the following items: “precious and semi-precious stones, precious metals and articles thereof” and “mining products”.

By structure of exports, the main increases were in “mining products” and “textile products” for 19.9% and 62.9%, respectively.

In 2015, Armenia’s external trade concentration level by countries has decreased, because of 4.7 pp. lower share of trade partner Russia in the structure of exports. The latter has diminished the sensitivity of Armenia’s economy to unfavorable developments in Russia.

Taking into account the continuous low level of external demand, the export volumes to Russia and the Euro Union have declined by 26.7% and 5.2%, respectively. At the same time, export volumes to Iraq, Georgia, Canada and Switzerland have grown.

In 2015, according to the Herfindahl-Hirschman index, the concentration of commodity exports has grown slightly compared to the previous year to 0.188. Such value of the index is mainly due to great share of mining and food sectors, which makes export more vulnerable to the developments in these sectors.