New Year Spending Figures Suggest Ineffectiveness, Suren Sahakyan

Secretary of the Executive Body of the Citizen's Decision party and economist Suren Sahakyan wrote on his Facebook page: “The story of the unprecedented 9 billion dram increase in trade turnover and an additional 300 million dram tax collected. On January 20, I stated that it would be good to present a report on New Year spending to understand how effective they have been. And unexpectedly, the Prime Minister clarified that issue live on his Facebook page on January 22.

According to the data he provided, during the ten-day period from December 28 to January 6, there was an increase of 9 billion drams in spending compared to the same period last year. According to the Prime Minister, this is the result of the same 271 million dram expenditure allocated by the government for holiday events. I was curious about what those numbers were because I knew it wasn't quite right. Now, let me present a small calculation for your attention.

In January-November 2018, trade turnover was 2.572 trillion drams. In the same period of 2019, it increased to 2.863 trillion drams. Thus, without New Year expenditures, the growth of trade turnover compared to the same period last year was 111.31%. According to the aforementioned numbers, the average trade turnover in 2018 for those ten days was 77 billion drams. That means, without spending 271 million drams, considering inflation and economic activity growth, trade turnover in any arbitrary ten-day period of 2019 should have reached 85.7 billion drams, which is 8.7 billion drams more than 77 billion drams of 2018. To clarify, even without the expenditure of those 271 million drams, the trade turnover would have increased by that same 9 billion drams.

Three observations need to be made:

• The effectiveness of New Year spending is still, to put it mildly, in doubt, and more bluntly, the figures suggest (but do not mandate) that they have been ineffective.
• It is clear that the economy is not the Prime Minister's strongest side, but it is also clear that the one providing and interpreting economic indicators to the Prime Minister (whose thoughts the Prime Minister later presents to the public in his own sauce) is acting against the Prime Minister.
• Since 8-9 thousand people follow my page, while more than 600 thousand follow the Prime Minister's page, unfortunately, that 271 million will remain in public perception as a feat of unprecedented results. Enthused by the numbers he mentioned, the Prime Minister promised that they would do this again and even more. Well…