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.
