ArmInfo. Armenia's economic growth rate is slowing down rapidly. This conclusion was reached by experts of the Luys Foundation after analyzing the socio-economic development of the Armenian economy in January-February 2025. According to the Foundation experts, the slowdown is mainly due to external factors being neutralized, leading to an increase in re-exports and contributing to a rise in the Economic Activity Index (EAI). In February, the growth rate of the EAI was only 1.5%, which is concerning. If these trends persist, annual economic growth will be significantly low.
In addition, there has been a significant decrease in the volume of foreign trade. Exports have decreased by 59.7%, and imports - 45.8%. These are substantial figures that will naturally have a negative impact on other macroeconomic indicators. The decline in exports is not only due to the neutralization factors like gold re-export. Excluding the contribution of the commodity group, the <precious and semi-precious stones, precious metals and products made of them>, then the growth in exports is still negative: -5.5%, indicating underlying issues. Some areas are experiencing a decline in exports, while growth rates in others are insufficient. Concerns about capital expenditures also persist.
In February 2025, the volume of capital expenditures (expenses on non-financial assets) decreased by 36.7% compared to February of the previous year, which is, naturally, an alarming phenomenon. This indicates that the sharp increase in capital expenditures in January was not related to an increase in capital expenditures on economic infrastructure (as it is not typically volatile). This volatility in capital expenditures suggests that defense spending is dominating, while capital spending on economic infrastructure remains low.
