Armenia`s GDP growth rates are returning to dynamics of two years ago

ArmInfo.Armenia's GDP in Jan-Sept 2023 slowed down in y-o- y growth from 21% to 12%, almost  returning to the rate of two years ago (11.1% in the same period of 2021). At current prices, the absolute value of GDP for 9 months of this year amounted to 6.5 trillion drams ($16.5 billion), against last year's 5.8 trillion drams ($14.2 billion). Of this amount, 40% or 2.6 trillion drams ($6.6 billion) were provided in Q3 2023, against 41.4% or 2.4 trillion drams in Q3 2022, according to the data of the RA Statistical Committee.

The quarterly dynamics of GDP was negative in Q1 alone - by 36.3%,  with a positive 16.5% dynamics in Q2 and with an acceleration of the  upward pace to 27.2% in Q3, which repeated the quarterly dynamics of  2022, but in more modest values, since a year ago a 36% decline in Q1  was followed by 19.8% growth in Q2, with the pace accelerating to  29.5% inQ3.

The GDP deflator index for 9 months of 2023 showed a quarterly  slowdown in growth - from 107.3% in Q1 to 103.1% in Q2, followed by a  slowdown to 101% in Q3. In the comparable period of 2022, a  deceleration of the growth rate, albeit a slight one, was observed  only in Q2, from 106.8% to 106.6%, and already in Q3, an acceleration  to 108.6% was recorded.  GDP per capita quarterly during Jan-Sept of  this year increased from 600.249 thousand drams ($1529) in Q1 to  716.830 thousand drams ($1852) in Q2 and subsequently reaching  862.991 thousand drams ($2233) in Q3. In 2022, the dynamics of GDP  per capita increased from 501.315 thousand drams ($1031) in Q1 to  641.146 thousand drams ($1425) in Q2 and to 802.116 thousand drams  ($1963) in Q3. Such an increase in GDP per capita is recorded against  the background of the y-o-y increase of the population of Armenia by  23.2 thousand people up to 2.994 million people by October 1, 2023,  while in the same period of 2022, per capita GDP showed growth with a  modest increase in population by 3.5 thousand people. It is worth  noting that such population growth is due to an impressive flow of  immigrants, many of whom preferred to obtain residence permits and  temporarily settle in Armenia.

Double-digit y-o-y GDP growth in Jan-Sept 2023 was recorded mainly  due to the: the trade sector - 22.9%, the construction sector - 17%  and the service sector - 13.4%, and to a small extent the  agricultural sector - 1.7%, while the industrial sector was in  decline by 0.6%. The dynamics of the energy complex are not given due  to changes in the calculation methodology and incomparability with  last year's indicators. A year earlier, in Jan-Sept2022, the highest  growth rate was shown by the service sector - 27.1%, followed closely  by the energy sector - 16.9%, the trade sector - 14.5%, the  construction sector - 14.3% and the industrial sector - 10%. Only the  agricultural sector was in decline - by 0.7%.  A slowdown in y-o-y  growth was also observed in foreign trade. Thus, the foreign trade  turnover of Armenia in Jan-Sept 2023 stalled in growth from 62.5% to  45.8%, which was due to the slowdown in the growth of exports and  imports - from 63.8-61.6% to 44.8-46.4 %. 

The Central Bank of the Republic of Armenia, in its forecast for 2023  updated in September, improved the expected GDP growth from the  previous 6.9% to 7.2%, while expecting a slowdown in 2024 to 5.6%.  The International Monetary Fund (IMF) forecasts Armenia's GDP growth  in 2023 by 5.5%, with a slight slowdown in 2024 to 5%. The World Bank  (WB) expects 4.4% economic growth in Armenia in 2023, with the pace  accelerating to 4.8% in 2024. The EBRD forecasts Armenia's GDP growth  by 6.5% for 2023, with a slowdown in 2024 to 4.5%. The draft RA  budget for 2024 envisages 7% economic growth, similar to the rate  envisaged in the RA budget for 2023. According to actual statistical  data, Armenia's GDP in 2022 accelerated in growth to double-digit  12.6% (from 5.8% in 2021), exceeding 8.5 trillion drams (21.6  billion, at the exchange rate of 393.57 AMD/$1 as of December 31,  2022). (The settlement exchange rate of the dram against the US  dollar as of September 30, 2023 revalued to 393.40 AMD/$1 from 405.65  AMD/$1 as of September, 2022).