ArmInfo.Given the upward pace recorded in the first half of the year, Armenia's GDP growth in 2022 will be quite high and will exceed expectations. Alexey Kuznetsov, Head of Economic Analysis at the Eurasian Development Bank (EDB), stated during a round table discussion of the Analytical Center for Strategic Research and Initiatives.
He added that the EDB forecasts that the economic growth rates in Armenia will continue in 2023-2024, expecting an average y-o-y GDP growth of 4%.
Speaking about the results of the first half of the year, Kuznetsov explained that such success was achieved primarily due to a significant increase in consumer demand in the country. <For example, the service sector showed growth of almost 20%, trade turnover grew by almost 10%. These two sectors provide about 80% of the growth that we are seeing>, he said.
At the same time, he indicated that consumer support was facilitated by a multiple increase in the number of tourists to Armenia, in particular, by a 4-fold increase in y-o-y terms. Moreover, 40% of tourists were from the Russian Federation, with a 2.5-fold y-o-y growth.
Another factor of support, he called a sharp increase in remittances from individuals. "For two months in a row we have seen a record inflow of transfers from the Russian Federation - in May the volume exceeded $266 million, and in June $462 million was already recorded," the expert said. In addition, according to Kuznetsov, the economic growth in Armenia was supported by the manufacturing industry, the construction sector, etc.
In his opinion, support for consumer demand will continue in H2 2022, continuing to contribute to the growth of the economy as a whole.
It should be noted that according to the preliminary data of the RA Statistical Committee, economic activity in Armenia in January-July 2022 increased by 13.1% per annum. In July 2022, compared to the same month in 2021, the growth in economic activity amounted to 19.4%.
In the first half of the year, 653,058 people arrived in Armenia from abroad, with an increase of 93.3% over the year, and 636,979 people left Armenia, with a y-o-y increase of 68%. Thus, the positive balance amounted to 16,079 people, while a year earlier for the same period, the migration balance was negative - 41,318 people.
According to the statistical data, during the reporting period, 3,770 foreign citizens received a residence permit in Armenia, of which 2,319 had a temporary status, and accordingly 1,451 had a permanent status. At the same time, the vast majority of those who received a residence permit are citizens of the Russian Federation.- 1,059 people (257 - temporary status, 802 - permanent status).
During the reporting period, 588,731 tourists visited Armenia for tourism purposes, which is 2.4-fold higher than a year ago.
According to the Central Bank of the Republic of Armenia, the inflow of transfers from Russia to Armenia increased 3-fold in H1 2022, to $1.13 billion, while the net inflow increased -fold, to $917.5 million. In Q2 2022 alone, the inflow of transfers from Russia increased 3.7-fold, and net inflow - 7-fold. The share of Russia in the inflow increased in H1 2022 to 60.5% from 39.6% in H1 2021, exceeding even the pre-Covid level of 51.3% in H1 2019. It would be appropriate to note that the surge in transfers from Russia to Armenia was provoked by the massive arrival of Russians along with the transfer of their capital. Moreover, on a monthly term, a significant increase in the net inflow of transfers from Russia began to be observed already in February (a 3-fold increase), continuing to grow at a rapid pace in the following months.
In early June, the World Bank improved its forecast for Armenia's GDP growth for 2022 from the previous 1.2% to the updated 3.5%. Then, in mid-June, the improved GDP growth for 2022 was announced by the Central Bank of the Republic of Armenia - from 1.6% to an updated 4.9%. And at the end of June, the International Monetary Fund presented its revised forecast for Armenia's GDP growth for 2022, improving it from the previous 1.5% to an updated 5%. According to official statistics, in 2021, Armenia's GDP reached a 5.7% growth from a 7.2% decline in 2020, slightly lower than the 7.6% growth in 2019 in the pre-Covid period.