Forecast: Armenia`s economic growth may exceed 8.5% in 2024

ArmInfo. In 2024, Armenia's economic growth may exceed 8.5%, depending on the trends observed  during the second half of this year. Doctor of Economics, professor, and head of the Research Center "Alternative," Tatul Manaseryan, who is also a member of the Eurasian Expert Club, made this statement  during a press conference on August 28, while presenting the Club's assessment.

 "But if the trends we observed in the first half of the  year continue, then 8.5% growth is quite realistic. We believe we can  achieve even more, despite the fact that production volumes in most  industrial sectors have slowed down after the high levels recorded in  2022-2023, and there has been a noticeable decline in re- exports by  the end of the year," he emphasized. According to the expert, these  dynamics will be facilitated by the high growth rates of  construction, which have already increased by 15.7% in January-June  of this year. Manaseryan noted that this growth will continue by  inertia. Another influential factor will be a significant increase of  private transfers, which, according to the economist, is already  observed today. As of August this year, the volume of private  transfers exceeded $ 3 billion. "Additionally, there has been a  notable rise in shadow transfers in Armenia, which will artificially  boost the purchasing power of the population. As a result, the volume  of consumption of goods and services, including local ones, will  increase," he said. Regarding the capital outflow from Armenia, the  economist stated that it decreased by almost 5%, totaling  $1.9  billion.

In addition, seasonal factors such as an increase in tourist traffic  and favorable conditions for agriculture development will  significantly contribute to economic growth.  During the press  conference, Manaseryan also mentioned the forecasts of  international  organizations. In particular, the expert stated that the EDB  forecasts Armenia's GDP growth to be 7.5% in 2024 and 4.2% in the  following year. The WB expects the Armenian economy to grow by 5.5%  in 2024, with a slight slowdown to 4.9% in 2025.  The IMF forecasts a  6% economic growth in 2024. The EBRD forecasts economic growth in  Armenia to be 6.2% in 2024 and 4.8% in 2025. The ADB expects a 5.7%  economic growth in 2024 and 6% in 2025. Fitch Ratings believes that  Armenia's economic growth will be 6% in 2024, slowing to 4.9% in  2025. S&P forecasts a 6.2% economic growth in Armenia in 2024, while  the UN estimates that Armenia's economy will grow by 5.2% in 2024,  slowing to 4.8% in 2025.  The state budget for 2024 includes economic  growth at the level of 7%, and the Central Bank expects Armenia's  economic growth in 2024 to fluctuate between 6.1%-6.8%.

Manaseryan also mentioned that the state budget for 2024 includes a  target inflation rate of 4% (+1.5%).  Referring to the Central Bank's  report on monetary policy, he pointed out that by the end of 2024,  inflation in Armenia is expected to range from 0.9-1.3%, in 2025 from  3.8-3.2%, and in 2026 - up to 4%.  Additionally, the economist  suggested that the Regulator may reduce the key rate by 0.25% again,  emphasizing its importance for further economic recovery. However, he  also highlighted that this alone is not sufficient for economic  development. In turn, political analyst and coordinator of the  Eurasian Expert Club Aram Safaryan added that in the first half of  2025, most economic sectors within the framework of the EAEU will  experience a decline. "But this should not frighten us or become a  reason for speculation.  The recession will come to an end in the  second half of next year, and we will again reach a recovery growth.  This year we forecast a high GDP and economic activity index. We  agree with the forecasts of international organizations that these  figures will noticeably decrease in 2025," he noted.