Armenia`s GDP growth rate slowed down in the first half of 2024

ArmInfo. Armenia's GDP in the  first half of 2024 exceeded 4.2 trillion drams or $10.6 billion,  showing a more noticeable slow down in annual growth at 7.3%. In  comparison, during the same period in 2023, there was a slight  decrease in double-digit growth from 18% to 16%. This is evidenced by  the data from the RA Statistical Committee, published on August 20  alongside the presentation of GDP at market prices. The GDP  experienced a negative trend in the first quarter, declining by  36.1%. 

However, rebounded in the second quarter with a positive  growth of 16%, which repeated the quarterly dynamics of 2023, where  there was a 36.3% decline in the first quarter followed by 16.5%  growth in the second quarter. The GDP deflator index for the first  half of 2024 showed a minimal quarterly growth, with a slight  acceleration from 100.6% in the first quarter to 100.8% in the second  quarter. In comparison, during the same period in 2023 there was a  noticeable slowdown in growth from 107.3% in the first quarter to  103.1% in the second quarter.

GDP per capita increased quarterly during the first half of this  year, rising from 637,706, 000 drams ($1,582) in the first quarter to  750,873, 000 drams ($1,930) in the second quarter. This trend was  also observed in 2023, from GDP per capita increasing from 600,,249,  000 drams ($1,529) in the first quarter to 716,830, 000 drams  ($1,852) in the second quarter. The growth in per capita GDP is  recorded against the background of an increase in Armenia's  population by 112.3 thousand people over the year - to 3.058 million  people as of July 1, 2024. In the same period of 2023, per capita GDP  growth was observed despite a decrease in the population by 16.4  thousand people, from 2.962 million to 2.946 million people,  according to updated data.

The slowdown in annual GDP growth in the first half of 2024 was  largely caused by a significant decrease in the growth of the  services sector, dropping from 16.8% to 4.4%. There was a minor  slowdown in the trade sector, decreasing from 23.6% to 22.9% and the  construction sector - from 17% to 15.7%. However, during the same  period, the industrial sector experienced a significant increase in  annual growth from 1% to 18.2%. The agricultural sector also saw a  slight advancement, moving from 2% to 4%. The energy sector was able  to improve its dynamics, transitioning from a 2.7% decline to 2.2%  growth.  At the same time, Armenia's foreign trade turnover showed a  significant increase in annual growth, rising from 72.9% in the first  half of 2023 to double that amount in the first half of 2024. This  was mainly due to a two-fold increase in exports and an 86.5% rise in  imports. This growth contrasted with the almost identical rates in  export and import growth the previous year - 72.8% and 73%,  respectively. It should be noted that the June forecasts of the IMF,  WB and the Central Bank of Armenia (CBA) predict a slowdown in  Armenia's GDP growth in 2024 and 2025. Specifically, the IMF expects  Armenia's GDP growth to slow down to 6% in 2024 and 5.3% in 2025. The  CBA also predicts a slowdown in GDP growth in 2024 to 6.8- 6.1% and  in 2025 to 6.1-3.8%. The World Bank expects Armenia's GDP growth to  slow to 5.5% in 2024 and to 4.9% in 2025. According to actual  statistics, Armenia's GDP, accelerated in growth in 2021-2022 from  5.8% to a double-digit 12.6%, but slowed down to 8.3% in 2023,  reaching 9.5 trillion drams ($24.2 billion) in absolute terms.