Armenia on way to economic crisis - expert

ArmInfo. Armenia is on the way to  a crisis, says Associate Professor of the Armenian State University  of Economics Aghasi Tavadyan.

GDP growth at 9.2% for the first quarter of 2024 seems impressive  only at first glance, notes Tavadyan.  However, there is an alarming  picture hidden behind the figures, he adds.

Thus, 4% of this increase is due to the re-export of gold, which  began in November 2023 and continued until May 2024. This led to an  artificial increase in GDP and export figures. But this gold rush had  only a short-term costly effect.

The 4% of additional value received from the re-export of this gold,  which was controversially paid to the state budget, provided about 2%  of the 8.7% economic growth in 2023, and in the first quarter of this  year - 4% of the growth of 9.2%.

It is alarming that the re-export of gold amounted to 4%, trade - 3%,  financial services - 1.1%, while the rest of the economy fell -0.1%>,  - the economist notes.

He notes that the main driver of GDP growth in 2022 was the inflated  financial sector. Then the inflow of capital from Russia increased by  4.5 times, and the net profit of the banking system increased by 3  times.  But now the situation has changed - and the inflow has been  replaced by an outflow of capital.

Another alarming trend is observed in the field of information  technology, which was previously declared as a strategic direction.  Since 2022, with the influx of relocators from Russia, this has  provided a significant part of GDP growth. But now this sector does  not provide growth, moreover, there is an outflow of IT specialists.

, asks Aghasi Tavadyan.