Economic growth in Armenia slowed due to a decline in the industrial  sector and foreign trade

ArmInfo. In Armenia, economic activity growth in January-February 2025 significantly slowed to 4.1% per annum (from 13.6% in the same period of 2024). Moreover, the  industrial sector, which was a growth driver a year earlier, is now  experiencing a double-digit decline.  According to preliminary data  from the RA Statistics Committee, this decline was accompanied by a  deterioration in the foreign trade, shifting from several-fold growth  to a significant decline.

According to statistics, the significant slowdown in economic  activity growth in January-February 2025 was mainly due to the  deterioration of the annual dynamics of the industrial sector, which  went from 28.9% growth to a 19.4% decline and a sharp slowdown in the  growth of the trade sector from 24.1% to 7.8%.  However, the service  sector managed to accelerate in annual growth from 5.2% to 12.4%, a  trend also observed in the construction sector, where growth  increased from 10.8% to 12.2%.  The annual dynamics of the energy  complex have improved noticeably, transitioning from a 4.9% decline  to 6.9% growth. The statistical report doesn't provide information on  the dynamics of the agricultural sector. According to statistics for  January-February 2025, the trade sector is leading in absolute value  with a volume of 822.7 billion drams ($2.1 billion). The service  sector takes second place with 556.1 billion drams ($1.4 billion),  followed by the industrial sector at 380.5 billion drams  ($959  million). Due to the lack of data from the agricultural sector, the  construction sector occupies the forth position with 44.6 billion  drams ($112.5 million). The volume of power generation in  January-February 2025 totaled 1703.6 million kWh, with 824.1 million  kWh generated in February alone. 

In February 2025, economic activity slowed down compared to February  2024,  with growth at  1.5% (down from 16.3% the previous year). In  February alone, there was a shift from a 45.3% decline to 5.3%  growth, whereas in February 2024, the shift was from a 45.1% decline  to 11.2% growth. The industrial sector also experienced a decline in  February 2025, with the pace slowing from 41.3% to 0.6%. In the same  month a year earlier, the sector saw  a shift from a 43.1% decline to   18.9% growth.  In February, aside from the industrial sector, the   service sector and the energy complex also experienced a decline,  with only the construction sector and the trade sector showing  double-digit growth. In annual terms (February 2025 to February  2024), all sectors demonstrated an upward trend, except for the  industrial sector, which declined by 26.6%. Specifically,  the  construction sector and the service sector showed the highest annual  growth at 12.7% and 12.1%, respectively, followed by the trade sector  at 6% and the energy complex at 5.8%.

In February 2023 to February 2024, almost all sectors showed growth,  except for the energy complex, which declined by 3.1%. The industrial  sector grew by 36.4%, the trade sector - by 28.3%, the construction  sector - by 11.7%, and the service sector - by 6%. However, Armenia's  foreign trade turnover in January- February 2025 decreased by  to 1.1  trillion. AMD ($2.8 billion), down 52%  from the previous year, when  it had doubled. This is due to a significant decline in both exports  and imports, which fell by 59.7% and 45.8% respectively. Last year  both export import  indicators had shown significant growth - 2.6  times (exports) and 73.2% (imports). As a result, the absolute value  of exports amounted to 413.2 billion AMD ($1.04 billion), and imports  - 692.7 billion AMD ($1.74 billion). In February 2025, foreign trade  turnover decreased by 61% compared to February 2024, with exports  declining by 67.7% and imports by 55.2%.  This was a stark contrast  to the previous year when foreign trade turnover had increased  significantly by 2.2 times driven by a 2.9 times in crease in exports  and a 79.9% increase in imports. 

It should be noted that since 2023, the methodology for calculating  the volume of generated power has changed in statistical reports.  Particularly, the volume of power generated by autonomous producers  is now being taken into account. Data for the agricultural sector are  only published in quarterly and annual statistical reports. (The  average calculated exchange rate of the dram in January-February 2025  was AMD 396.74 / $ 1).