ArmInfo.After two and a half years of recovery and sharp growth in Armenia, a decrease in exports and imports of almost all services has been recorded since Q4 2023. This is fraught with losses in terms of the country's balance of payments and ensuring the budgeted 7% GDP growth. Economist Aghasi Tavadyan, associate professor of the State University of Economics of Armenia, came to this opinion after analyzing the quarterly data of the RA balance of payments.
In particular, according to the table presented on the analytical resource, the main sectors of service exports showed the following dynamics: travel grew by 172.9% in 2021, after an 81.2% decline in 2020, and the growth was 211% in 2022. As the economist emphasizes, the more than triple growth of this sector in 2022 was mainly due to the acceleration of post-pandemic recovery and the presence of a large number of Russian immigrants and tourists.
Thus, exports of services totaled $1.7 billion in 2021: travel services of which -45.2%, IT - 22.0%, transport services - 17.5%, construction services provided - 5.0%. In 2022, exports of services increased to approximately $4.2 billion: travel services of which - 58.4%, IT - 17.0%, transport services - 13.4%, construction services - 2.5%. Meanwhile, the entire export of goods and services in 2022 totaled about $10 billion, which means that about 45% of the country's currency came through the export of services, Tavadyan emphasizes.
However, as the expert points out, already in 2023, the export of tourism services began to slow down, recording a 23.4% increase. Although the export of tourism services increased by 23.3% y-o-y, the ratio of the Q4 2023 to Q3 shows that tourism or travel services decreased by almost half - by 42.6%. In particular, tourists brought 780 million dollars to the country in 2021, 2.5 dollars in 2022, and 3 billion dollars in 2023. "This is exactly how much tourism services in Armenia cost tourists, and this is exactly how much they left in the country's treasury and the reduction in volumes export of tourism services faces serious problems," he notes.
As for IT services, which are one of the drivers of service exports, from 2020 to Q3 2023, growth of 25.5%, 16.4%, 86% and 51% was recorded in this line, respectively. In Q4 2023 to Q3, the figure decreased by 8.7%; in monetary terms,it was $1 billion for 2023. "Many representatives of the IT sector, mainly immigrants, were scared off by Armenia with its high cost. The revaluation of the Armenian dram against the American currency also played an important role in their new "relocation", since they mainly receive their salaries in US dollars," Aghasi Tavadyan emphasizes.
According to the economist, the share of tourist services and IT exports in 2022 totaled 58% and 17%, respectively. In 2023, they reached 53.5 and 19.1%, respectively. The growth of these services in 2022- 2023 also contributed to a significant portion of Armenia's 8.7% economic growth. "The downward trend in service exports, which may continue in 2024, is of particular concern from the point of view of the country's current balance and ensuring the 7 percent economic growth planned by the current budget law," he summarizes.
Notably, Armenia's GDP growth slowed down to 8.7% in 2023 (from 12.6% in 2022), to 9.503 trillion drams ($24.2 billion) at current prices. The drivers of GDP growth in 2023 were largely the trade sector - 25.7%, the construction sector - 14.8%, the service sector - 10.3%, and to a slightly lesser extent the industrial sector - 4.1%, and the agricultural sector was in a decline of 0.3%.
