Luys Foundation: Following the results of 2024, Armenia`s economic  growth  may be below 5.8%

ArmInfo. A significant slowdown in the growth rate of economic activity in Armenia was expected, as stated in the analytical study conducted by the Luys Foundation. The study assesses the socio-economic situation in  Armenia for January to November 2024.

 The factors that contributed  to high growth rates in the previous year have now been neutralized,  leading to a slowdown in the dynamics of economic activity. Analysts  predict that growth in December will also be quite low due to these  same factors. 

The Foundation explained that the increase in economic activity in  2023 was primarily driven by a significant rise  in the volume of  gold re-exports, which were counted as  products of domestic  production.  However, this year's slowdown can be attributed to a  notable decrease in gold re-export volumes, as well as the fact that  only a small portion of it was classified as domestic production.  In  November 2024, compared to November 2023,  the Foundation's study  showed  a decline in industry volumes, exports and imports. <This is  also due to a decrease in gold re-export volumes. Additionally, other  sectors within the industry and the export structure are also  experiencing either low growth rates or a decline. This is concerning   as it may lead to a decrease in the economy's potential,> the  Foundation's analysis says.

The study also noted that macroeconomic indicators may deviate from  the level forecasted by the government. According to analysts,  economic growth by the end of 2024 may be below the 5.8% target set  in the draft budget for 2025.  Additionally, inflation, which is  currently at a relatively low level as of November, may also fall  below forecasts. In these conditions, as the study suggests that the  budget scenario for 2025 is at risk.  <In conditions of slowing  economic activity, the volume of lending to the population is  increasing at a rapid pace. However, the growth of economic activity  and the average monthly wage rate are relatively low compared to the  increase in loans. Specifically,  consumer and mortgage loans are  growing by 30.6% and 25.8%, respectively, which is significantly  higher than the growth of the population's income,>  analysts of the  Luys Foundation note.