Economic activity growth in Armenia slowed to 8.1% in January-October 2024

ArmInfo. In Armenia, the  economic growth rate for January- October 2024 has decreased to 8.1%  per annum (down from 9.2% in the same period in 2023). However,  unlike the previous year, the industrial sector has become a key  diver of growth. According to the final data from the RA Statistical  Committee, this is accompanied by ongoing high growth rates in both  exports and imports.

Based on the information revealed in the final statistical report,  the significant increase in industrial production is no longer driven  by the jewelry industry, which previously showed substantial growth,  but is now experiencing a decline of 28.1%. Instead, the high growth  in the industrial sector is now supported to a greater extent by the  production of basic metals, coke and petroleum products, to a  slightly lesser extent by the production of electrical equipment,  furniture, woodworking industry, and metallurgy.  Moreover, it is  worth noting that the production of coke and liquefied petroleum  products has recently shown the highest growth, despite having a  minimum volume (20.7 times in the reporting period).  Nevertheless,  it is the production of basic metals that has solidified its position  in the top three leaders in the industrial sector in terms of volume  (395.7 billion drams). Basic metals also maintain high growth rates  (2.9 times). In comparison, the food industry, which holds the first  position, is not particularly ahead in terms of volume (493.8 billion  drams) and is showing weak growth (3.6%).

According to the final statistics, the growth of economic activity  from January to October 2024 was largely driven by the trade sector,  which saw a decrease in growth rates from 23.3% to 18.8%, the  construction sector - a decrease in annual growth rates from 16.4% to  15.5%. The industrial sector  moved from a 0.5% decline to 11.7%  growth. There was  a notable slowdown in growth  in the services  sector, dropping from 12.1% to 5.8%. The energy complex showed  positive annual dynamics shifting  from a 3.5% decline to 4.6%  growth. There is no data available for the agricultural sector, as  they are only published in quarterly and annual reports.

 According to statistics from January to October 2024, the trade  sector leads with a volume of over 4.99 trillion  AMD ($12.7  billion). Following closely is the service sector - 2.7 trillion AMD  ($6.96 billion), the industrial sector - 2.4 trillion ($6.1 billion).  The construction sector takes the fourth position, due to the lack of  data on the agricultural sector - 484.5 billion AMD ($1.2 billion).  The volume of electricity generation in January-October 2024 amounted  to 7619.3 million kWh, of which 767.8 million kWh in October alone.  It is worth noting that the gap between the  industrial and the  service sector is becoming narrowing, as a result of the industrial  sector's double-digit growth and the service sector's slowed growth.   A slowdown in economic activity growth was also observed in October  2024 compared to October 2023, from last year's 6% to the reported  4.2%. In October alone, the dynamics worsened further with a 4.6%  decline, compared to September's 6.6% growth (as in October 2023,  from 3.4% growth to 1.4% decline). 

Additionally, in October 2024, the industrial sector saw a  significant acceleration in growth, jumping from 1.6% to 10.9%. The  same trend was observed a year earlier in the same month, with growth  shifting from  a 1.5% decline to a  10.9% increase, similar to the  current one.  In the period from October 2024 to October 2023, all  sectors demonstrated positive growth. In particular, the energy  sector showed annual double-digit growth - 20.4%, the trade sector -  13.7% and the construction sector - 13.5%, followed by the industrial  sector - 5.3% and the services sector - 5.2%. Comparatively, in the  previous year from October 2023 to October 2022, only the energy  sector was in decline (10.5%), and the rest of the sectors were  growing: the trade sector - 26.3%, the construction sector - 13.6%,  the services sector - 2.1% and the industrial sector - 0.6%. Against  this background, Armenia's foreign trade turnover in January-October  2024 reached 10.3 trillion. AMD ($26.2 billion), with an acceleration  of the already high annual growth rate to 67.6% (from 41.2% in the  same period of 2023). This acceleration can be attributed to the  substantial growth of exports, which increased from 38.5% to 95.1%,  compared to  imports which grew from 42.9% to 50.8%. The total value  of imports was 4.5 trillion ($11.5 billion0 and exports were 5.8  trillion AMD ( $14.7 billion).

In October 2024, foreign trade turnover growth slowed from 19.2% to  12.9% to compared to October 2023.  This is due to a decrease in  import growth from 22.4% to 6.6%, while export growth showed a modest  increase from 14.4% to 23.1%. In October alone, trend reversed with  exports and imports showing growth rates of 7.5-11.3% compared to a  previous decline of 12.3-10.4%. This shift resulted in foreign trade  turnover changing from an 11.2% decline to 9.7% growth. It should be  noted that since 2023, there have been changes in methodology for  calculating the volumes of generated electricity  in statistical  reports. This includes accounting for electricity generated by  autonomous producers. Data for the agricultural sector is only  published  in quarterly and annual statistical reports. (The average  exchange rate of the dram in January-October 2024 was AMD392.72 /$1).