Armenia`s GDP grows by 25.6% in Q3 2024, surpassing $2.3,000 per  capita 

ArmInfo.Armenia's GDP for the first 9 months of 2024 exceeded 6.9 trillion drams or $17.7 billion, showing a 12.8% year-on-year increase. This growth rate is similar to  the previous year, when a slowdown from 21% to 12% was observed. This  is evidenced by the data from the RA Statistical Committee, released  on November 20, presenting the GDP at market prices.  The GDP  dynamics for the year showed a negative trend only in the first  quarter with a decline of 36.1%.  This was followed by a positive  growth of 16.1% in the second quarter and a further acceleration to  25.6% in the third quarter. This pattern mirrored the quarterly  dynamics of 2023, where a 36.3% decline in the first quarter was  followed by a growth of 16.5% in the second quarter and a further  acceleration to 27.2% in the third quarter. 

The GDP deflator index for the 9 months of 2024 showed minimal annual  growth: 100.8% in the first quarter, 100.6% in the second quarter,  and 101.1% in the third 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 and further down  to 101% in the third quarter. Quarterly GDP per capita increased  steadily over the first 9 months of this year: from 637,651,000 drams  ($1,581 thousand) in the first quarter to 750,902,000 drams ($1,931  thousand) in the second quarter and further to 894,328,000 drams  ($2,306 thousand) in the third quarter. This trend was also observed  in 2023, with GDP per capita increasing from 600,249,000 drams  ($1,529,000) in the first quarter to 716,830,000d drams ($1,852,000)  in the second quarter and reaching 862,991,000 drams ($2,233,000 in  the third quarter. 

This growth in per capita GDP is recorded against the background of  an increase in Armenia's population by 112.7 thousand people - to  3.067 million people by October 1, 2024. In the same period of 2023,  per capita GDP growth was observed despite a population decrease of  16 thousand people (from 2.971 million to 2.955 million people -  according to updated data). It is important to note that this time,  population growth is not primarily due to natural growth but rather  due to the citizens of Artsakh forcibly displaced to Armenia during  the tragic events of September 2023. Annual GDP growth was mainly  supported by the trade sector - 19.5%, the construction sector -  15.9% and the industrial sector - 12.6%. To a lesser extent by the  services sector - 5.9%, the energy complex - 3% and the agricultural  sector - 1.8%. For comparison, we note that a year earlier, the  industrial sector and the energy complex were in decline - 0.6% and  2.8%, respectively, while other sectors demonstrated higher growth  rate: trade - 23.3%, construction - 17%, services - 13.4%, and the  agricultural sector showed the smallest growth at 1.7%.

 Armenia's foreign trade turnover continued to accelerate in growth,  increasing from 45.8% in the first 9 months of 2023 to 73.5% in the  first 9 months of 2024. This growth was mainly due to a 2.1-fold jump  in exports and a 54.2% increase in imports. This was a significant  improvement compared to the previous year, which saw similar growth  rates in exports and imports at by 44.8% and 46.4%, respectively. It  is worth noting that a substantial growth (6.1-6.3 times) in both  exports and imports came from precious metals and stones. Given the  low production volumes in the jewelry industry, this indicates  re-export and re-import activities, which still have high volumes  based the data for the first 9 months of 2024. This is further  supported by semi-annual customs data, showing that gold is primarily  imported from Russia (95.9%) and exported to the UAE (84.2%).  Additionally, the majorityof diamonds come from India (45.2%), Russia  (21.4%) and Hong Kong (19.7%) and are also exported to the UAE  (82.7%).

 It should be noted that the Central Bank's September forecast for  GDP growth in 2024 (6.5-5.8%) now differs little from the updated  forecasts of the IMF and WB. They predict that Armenia's GDP growth  in 2024 will slow down to 6% and 5.5%, respectively. International  rating agencies also predict  a similar slowdown in Armenia's GDP  growth in 2024: S&P Global Ratings expects up to 6.2%, Fitch Ratings  - up to 6% and EBRD expects 6.2% growth in Armenia's GDP in 2024. For  2025, the Central Bank's forecasts for GDP growth (5.9-3.7%) also  align closely with the expectations of EBRD, IMF, and WB - 4.8%, 4.9%  and 5%, respectively. The draft budget for 2024 includes a GDP growth  of 7%, while the draft budget for 2025 sets a lower bar of 5.6%.  According to statistics, Armenia's GDP growth in 2023 slowed to 8.3%  (from 12.6% in 2022).