Economic activity growth in Armenia continues to slow down

ArmInfo. In Armenia, economic activity growth in the first  half of 2024 slowed to 10.4% per annum (from 11.4% in the same period  of 2023). But unlike last year, the industrial sector has become one  of the growth drivers. According to preliminary data from the RA  Statistical Committee, this is accompanied by continued high growth  rates of exports and imports.

Despite the fact that the preliminary statistical report does not  provide for the disclosure of more detailed information,  nevertheless, judging by the data of previous months, the high growth  of industrial production no longer comes from the jewelry industry,  which previously demonstrated growth several times, now finding  itself in stagnation. In particular, the high growth of the  industrial sector is now supported to a greater extent by the  production of basic metals, electrical equipment, and to a slightly  lesser extent by the production of finished metal products,  furniture, woodworking industry, leather production and metallurgy.   Moreover, it is the production of basic metals that now leads in the  industrial sector not only in impressive growth rates, but also in  volume, whereas previously the first position was held by the food  industry, for which the protracted decline cost the loss of primacy.

According to statistics, the growth of economic activity in the first  half of 2024 was largely due to the trade sector - with a slight  slowdown in growth rates from 23.6% to 22.9%, the industrial sector -  with a sharp acceleration of annual growth rates from 1% to 18.2%,  and the construction sector - with a slowdown in annual growth rates  from 17% to 15.7%. A strong slowdown in growth during this period was  recorded in the services sector - from 16.8% to 4.4%. Against this  background, the annual dynamics of the energy complex significantly  improved - with an exit from a 2.7% decline to 5% growth. The  agricultural sector managed not only to maintain growth, but also to  accelerate annual growth rates from 2% to 4%. According to statistics  in the first half of 2024, in absolute terms, the trade sector holds  the lead with a volume of over 2.8 trillion AMD ($6.95 billion). The  second place in terms of volume is occupied by the service sector -  1.6 trillion AMD ($3.9 billion), the third place is occupied by the  industrial sector - 1.4 trillion ($3.6 billion), the fourth place is  occupied by the agricultural sector - 285.8 billion ($721.6 million),  and the fifth place is occupied by the construction sector - 202  billion AMD ($510 million). The volume of electricity generation in  the first half of 2024 amounted to 4291.4 million kWh, of which 605.6  million kWh in June alone. It is worth noting that the volumes of the  industrial sector have almost equaled the volumes of the service  sector, whereas previously the gap was quite noticeable. This was the  result of a strong acceleration of growth in the industrial sector  and a sharp slowdown in the growth of the service sector.  However,  in June 2024, compared to June 2023, economic activity accelerated in  growth, but barely noticeably - to 7.1% (from 6.8% a year earlier),  and in June alone it accelerated in growth to a double-digit 11.2%  from 2% in May (against a restrained acceleration of growth in June  2023 from 7.4% to 9.9%).  Moreover, in June 2024, the industrial  sector lingered in decline, with an acceleration in rates from 0.2%  to 2.4%, while in June 2023 growth was recorded, but with a slowdown  in rates from 9.9% to 2.8%. Along with the industrial sector, the  energy complex lingered in decline in June with an imperceptible  slowdown in rates from 5% to 4.5%. At the same time, the service  sector rebounded in growth from a stagnant 0.4% to 5.5%, the trade  sector also noticeably accelerated in growth - from 1.4% to 4.3%, and  the construction sector almost maintained its growth rate, only  imperceptibly stalling from 20.1% to 19.9%. I In annual terms (June  2024 to June 2023), all sectors demonstrated an upward trend, except  for the energy complex, which found itself in a 5.3% decline. In  particular, the largest annual double-digit growth was shown by the  construction sector - 18% and the trade sector - 16.2%, followed by  the services sector - 7.8%, and the industrial sector - 1.4%. A year  earlier, in June 2023 to June 2022, the energy sector was in decline  - by 0.3% and the industrial sector - by 7.4%, while of the remaining  sectors, the trade sector showed higher growth - 20.3% and the  construction sector - 18.1%, while the services sector was able to  provide growth of only 4%. 

Against this background, Armenia's foreign trade turnover in the  first half of 2024 exceeded 7.3 trillion drams (over $ 18.4 billion),  with an acceleration of the already high annual growth rate to 2  times (from 72.9% in the same period of 2023). This is due to the  acceleration of high annual growth rates of both exports - from 72.8%  to 2.3 times, and imports - from 73% to 86.5%, the absolute value of  which amounted to 3.1 trillion and 4.2 trillion drams ($7.9 billion  and $10.5 billion), respectively. In June 2024, compared to June  2023, foreign trade turnover accelerated in growth from 21% to 34.6%,  which was due to a sharp acceleration in export growth from 2.5% to  59.9% while import growth slowed down from 33.8% to 20.6%. It should  be noted that since 2023, the methodology for calculating the volumes  of generated electricity has changed in statistical reports, in  particular, the volumes of electricity generated by autonomous  producers have also begun to be taken into account. For the  agricultural sector, data are published only in quarterly and annual  statistical reports. (The average settlement rate of the dram in  January-June 2024 was 396.09 dram/$1).