Armenia`s GDP growth in 2024 will be significantly lower than in 2023  - Luys Foundation

ArmInfo. GDP growth in Armenia in 2024 is expected to be significantly lower than in 2023. This is the conclusion reached by experts from the Luys Foundation after analyzing the socio-economic development of the Armenian economy from January to December of last year.

According to the document, the growth rate of economic activity  tended to slow down during the year, mainly due to the neutralization  of factors that had previously led  to high rates of economic growth.  The positive impact of last year's growth factors (such as the influx  of people and capital into the Republic of Armenia, export growth,  etc.) initially resulted in high rates of economic growth at the  beginning of 2024.  However, growth gradually slowed down as the  effects of these factors diminished. As a result, in 2024, the  Economic Activity Index (EAI) was 8%, approximately 1.8 percentage  points lower than the previous year.  However, in 2024, the  difference between the EAI and real GDP growth was larger, indicating  that economic growth in 2024 would be significantly lower than in  2023.

In 2024, the structure of the economy continued to deteriorate as it  became more dependent on growth due to temporary factors, while the  role of activities important for long-term growth decreased. Negative  shifts were also observed in the structure of industry and exports.

In 2024, amidst economic activity and moderate growth in household  incomes in 2024, the volume of loans increased at a significantly  higher rate. Mortgage and consumer lending increased by 32.9% and  33.0%, respectively. Given the growth in household incomes  (particularly, the growth of nominal wages by only 6.4% and a  decrease in the volume of remittances from abroad), the growth of  loans at such a rate contains risks.