EDB names reason behind Armenia's economic slowdown in November
YEREVAN, December 30. /ARKA/. Analysts from the Eurasian Development Bank (EDB) have analyzed the reasons behind the slowdown in economic activity in Armenia in November this year.
"Economic activity in Armenia increased by 7.4% in January-November 2024. This growth was primarily driven by the trade (+18.0% y/y), services (+6.3% y/y), and industry (+7.6% y/y) sectors. In November, as expected, economic activity slowed down (+1.2% y/y after +4.2% y/y in October) due to a decline in the industrial sector (-19% y/y in November after +5.2% y/y in October), caused by the exhaustion of the positive effects from increased foreign trade and precious metals processing," the EDB's weekly macro review states.
It is noted that, in this context, export (+73.9% y/y) and import (+41.5% y/y) indicators slowed in January-November, with both showing negative dynamics in November (down by 35% y/y for exports and 22.8% y/y for imports).
"Domestic demand has a positive impact on business activity," the study adds.
According to Armenian Statistical Committee, Armenia's foreign trade turnover in January-November increased by 54%, reaching $28.2 billion. However, in November 2024, compared to November 2023, this figure decreased by 27.4%, and compared to October 2024, it fell by 15.6%. Armenia's exports in January-November 2024 amounted to $12.3 billion, while imports totaled $15.9 billion.
Economic Growth Projections for Armenia
Armenia's economic growth forecast for 2024 is 7% in the state budget, while the 2025 budget anticipates 5.1% growth. According to the Central Bank's monetary policy report for the fourth quarter of this year, Armenia's GDP growth is expected to be 6% by the end of 2024, with projections for 2025 ranging from 7.1% to 4.8%, for 2026 from 4.7% to 7%, and for 2027 between 5% and 6.2%.
The EDB forecasts Armenia's GDP growth at 6% for 2024 and 5.5% for 2025. The World Bank (WB) expects 5.5% growth in 2024 and 5% in 2025. The IMF predicts 6% growth for Armenia in 2024 and 4.9% in 2025. The European Bank for Reconstruction and Development (EBRD) forecasts 6.2% growth in 2024 and 4.8% in 2025. The Asian Development Bank (ADB) anticipates 5.7% growth in 2024 and 6% in 2025. According to Fitch Ratings, Armenia's economy will grow by 6% in 2024 and 4.9% in 2025. S&P forecasts a 6.2% growth for 2024, while the UN expects 5.2% growth in 2024 and 4.8% in 2025.