ArmInfo. If current trends in the Armenian economy continue, GDP growth by the end of the year will be lower than government forecasts, as stated by experts of the Luys Foundation, who analyzed the socio-economic developments in the Armenian economy in January-March 2025.
According to the Foundation's experts, the growth rate of economic activity in Armenia has slowed down significantly, which is mainly due to the impact of gold re-export on comparable indicators, as well as the neutralization of factors that previously drove high growth rates. The latter was an expected phenomenon, and if these trends persist, economic growth by the end of the year will be lower than government forecasts.
Additionally, export volumes have significantly decreased. Exports dropped by 61.8% in January-March, worsening by 2.6 percentage points compared to January-February. However, it is concerning that the decline in exports is not just attributed to the neutralization of the gold re-export factor, but also to a decrease or low growth in exports of other commodity groups. Thus, excluding the contribution of the commodity group <precious and semi-precious stones, precious metals and products made of them>, export growth remains negative: -2.4%, which indicates that the problems are more profound and alarming.
Experts also point out that the inflation rate is increasing rapidly. After a fairly long period of low inflation, the rate of price growth is rapidly increasing, reaching 3.3% in March. In these conditions, the Central Bank has already halted its policy of reducing interest rates. Further acceleration of inflation amidst the backdrop of slowing economic growth could have a negative impact on the standard of living of the population.
<The rate of credit growth continues to accelerate. Given the current level of economic growth, as well as the low growth of household income, loans are increasing by approximately 30%. At the same time, the main growth in lending is due to consumer and mortgage loans, which may not yield economic results in the upcoming years. Therefore, such a high growth in lending is a cause for concern and may pose a risk to the stability of the financial system," the Luys Foundation noted.
