ArmInfo. Armenia's GDP grew by 12.6% in 2022, far exceeding not only 5.7% in 2021, but also the pre-Covid 7.6% in 2019, reaching 8.497 trillion drams ($19.5 billion). This is evidenced by the data of the RA Statistical Committee published on February 20.
Notably, the CBA forecast came closest to real GDP growth, projecting 12.9% growth in 2022, while the IMF and WB expected a more moderate growth 11% and 10.8% respectively. The quarterly dynamics of GDP in 2022, as in previous years, was negative in Q1 alone - 36%, after which a 19.6% increase was recorded in Q2, accelerating to 29.4% in Q3, but already in Q4 it slowed down to 13.8%. As a comparison, we note that in 2021, the quarterly dynamics of GDP was as follows: the decline by 34.8% in Q1, was replaced by 17.5% growth in Q2, which accelerated to 25.6% in Q3, but then slowed down to 13.3% in Q4.
The drivers of GDP growth in 2022 were mostly the service sector - 28.2%, the trade sector - 17%, the energy complex - 16.1% the construction sector - 12.5%, and to a slightly lesser extent the industrial sector - 7.9% . At the same time, the agricultural sector managed to get out of the recession by 0.4% growth. A year earlier, in 2021, GDP growth came from the service sector - by 7.8%, the trade sector - by 7.5%, the construction sector - by 7.4%, the industrial sector - by 3.3%, while the energy complex and the agricultural sector were in decline by 0.6% and 1.1% respectively. In pre-Covid 2019, the highest growth was shown by the service sector, the industrial sector and the trade sector - 15%, 9% and 8.9% respectively, against the backdrop of a modest growth in the construction sector by 4.6%, with a decline in the energy complex by 1.9% and the agricultural sector by 4.2%. At the same time, Armenia's foreign trade turnover significantly accelerated in growth from 17.7% in 2021 to 68.6% in 2022. In this context, the same tangible acceleration of growth was observed both in exports from 19.1% to 77.7%, and in imports - from 16.9% to 63.5%. In the pre-Covid 2019, the upward dynamics of these indicators looked much more modest: the growth of foreign trade turnover by 10.4% came from the growth of exports by 9.4% and imports by 10.8%.
The Armenian economy reached such high growth under the influence of factors that arose due to the Russian war in Ukraine and the unprecedented and large-scale anti-Russian sanctions applied by the Collective West, which forced many Russians to leave their homeland. The arrival of a huge number of immigrants was also tangible in this context. According to preliminary estimates of the authorities, about 65 thousand citizens have moved mainly from Russia, as well as from Ukraine and Belarus. The immigrants also moved their capital and business to the host country. The duration of this positive shock, which increased not only the external, but also the macroeconomic and fiscal indicators of Armenia, is still unclear, but according to the assumptions of international financial organizations, a significant part of the new immigrants will stay in Armenia for at least 2-3 years, and therefore it is very likely, will have some positive effects.
It is appropriate to note that not only the Central Bank, but also the International Monetary Fund and the World Bank forecasted a slowdown in GDP growth for 2023, to 4.6%, 4.5% and 4.5%, respectively. The WB's January outlook report notes: " In the South Caucasus, growth in 2023 is projected to halve to 3.3 percent. The forecast deceleration reflects weakening momentum after the strong rebound in 2021-22, the slowdown in the euro area, ongoing border tensions between Armenia and Azerbaijan, and the ongoing contraction of output in Russia, one of the South Caucasus's closest economic partners. Recession in Russia and subdued growth in China are anticipated to weigh on activity, especially in the South Caucasus and Central Asia. Regional activity is also expected to continue to be dampened by tightening financing conditions as central banks grapple with abovetarget inflation."
