ArmInfo. The World Bank has maintained its previously improved forecast for Armenia's GDP growth at 5.5% in 2024 and 4.9% in 2025. This is noted in the World Bank's June Global Economic Prospects report.
According to the World Bank's forecast, in the Europe and Central Asia (ECA) region, Armenia's GDP growth rate for 2024 is the second after Tajikistan (6.5%), and for 2025 it is the third after Ukraine (6.5%) and Georgia (5%).
For the ECA region as a whole, the World Bank expects a slight slowdown in economic growth to 3% in 2024 and to 2.9% in 2025 (from an actual 3.2% in 2023).
Notably, in its previous April "Europe and Central Asia Economic Update, April 2024: Unleashing the Power of the Private Sector" report the World Bank noted that in the sectoral breakdown, the drivers of Armenia's GDP growth in 2024, as before, will be the services - 6.3% and the industrial sector - 5.3%, but compared to the 2023 rates, both the services and the industrial sector will stall in rates, respectively, from 11.1% and 5.5% in 2023. As for the agricultural sector, as before, the WB forecasted weak growth with a slight acceleration to 0.9% in 2024 from 0.2% in 2023. In 2025, the slowdown in growth in the services and the industrial sector will continue - to 5.5% and 4.7%, respectively, and the agricultural sector will accelerate in growth to 1.2% alone.
The World Bank justifies the projected slowdown in Armenia's economic growth in 2024 to 5.5% (from 8.7% in 2023) by the slowdown in investment growth and the maintenance of a negative trade balance. A strong slowdown in growth is projected for exports and imports in 2024, to 5.2% and 6.7%, respectively (from almost the same 28.7% and 28.3% in 2023), with a slight acceleration in 2025 to 5.6% and 7%. Armenia's budget deficit will worsen to 4.7% of GDP in 2024 (from 4.1% in 2023), but in the medium term there will be budget consolidation, which will reduce this figure to 3.5-3.1% of GDP. Armenia's current account deficit will worsen to 3.2% of GDP in 2024 (from 2.3% in 2023), but will remain manageable at 3.4-3.5% in the medium term. According to the World Bank forecast, Armenia's public debt to GDP ratio will continue to grow - to 49% in 2024 (after growing to 48.1% from 46.7% in 2023), but then in 2025-2026 there will be a decline to 48.6-48.2%. Thanks to stable economic indicators and low inflation, according to the WB forecast, the poverty rate in Armenia, calculated on the basis of purchasing power parity of $6.85 per person per day (PPP 2017), will gradually decrease to 47.7% in 2024 and further to 46.6% in 2025 (from 49.1% in 2023).
IMF forecasts a slowdown in GDP growth for Armenia in 2024 to 6%, and the Asian Development Bank - to 5.7%. The forecasts of international rating agencies for Armenia's GDP growth in 2024 look slightly more optimistic, in particular, S&P Global Ratings expects a slowdown in rates to 6.2%, and Fitch Ratings - to 6%. The Central Bank, with the transition to a new monetary policy development system (FPAS MARK II), began to calculate the GDP forecast for several scenarios in 2024 and indicate the expected growth not at one specific level, but in a range. In particular, according to the new June forecast of the Central Bank of the Republic of Armenia, GDP growth will be within 6.8-6.1% in 2024, and the growth drivers will be, to a greater extent, the construction sector - 12.7% and the industrial sector - 8.3-7.5%, and to a lesser extent, the services - 6.5-5.8% and the agricultural sector - 3.3-2.8%. Moreover, the Central Bank projects an acceleration of growth in the industrial and agricultural sectors (from 1.7% and 0.2% in 2023), while a slowdown will be observed in the construction sector and the service sector (from 15.7% and 11.4% in 2023).
