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EDB names reason behind Armenia's economic slowdown in November

30.12.2024, 10:40
Analysts from the Eurasian Development Bank (EDB) have analyzed the reasons behind the slowdown in economic activity in Armenia in November this year.


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.