Eurasian Development Bank expects Armenia’s economy to grow by 7.5% in 2024, by 4.2% in 2025
Armenia#39;s GDP will increase by 7.5#37; in 2024, according to a forecast by the Eurasian Development Bank #40;EDB#41;
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YEREVAN, June 21. /ARKA/. Armenia's GDP will increase by 7.5% in 2024, according to a forecast by the Eurasian Development Bank (EDB).
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Previously, the EDB forecast Armenia's GDP growth at 5.7% in 2024 and 5.3% in 2025.
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“Higher rates of economic growth than previously expected are associated with strong business activity in January–April against the backdrop of high growth rates in the processing and export of gold products. The influence of this factor on GDP dynamics will be exhausted in the fourth quarter of this year,” bank analysts noted.
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It is said that the strengthening domestic demand, the expansion of consumer lending and investment, as well as low consumer prices will be the key growth factors this year.
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“The impact of fiscal policy is stimulating. In 2025, economic growth will return to a balanced pace at 4.2% and 4.9% in 2025 and 2026, respectively. In 2024, a slight cooling in the economic growth of the main trading partners is expected. This will curb remittances and external demand for most exported goods. However, export performance will remain strong due to ultra-high volumes of foreign trade in gold products,” the forecast says.
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It is noted that at the beginning of 2024, the growth rate of the Armenian economy accelerated. In January–April, the economic activity indicator increased by 13.2% y/y. The main driver was
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industrial sector (+26.8% y/y in January – April). The contribution of the main sectors to business activity was positive, but this performance was due to the concentration of growth in some sectors. During this period, the growth of industry and trade (+26.7% y/y) was ensured mainly by a multiple increase in the processing of gold jewelry and foreign trade in them, and the dynamics of services (+3.9% y/y) was due to an increase in the volume of financial activities (+16.8% y/y). At the same time, the output dynamics of most other service and manufacturing sectors remained weak.
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“Industrial growth continued to accelerate at the beginning of the year. This is due to the increase in processing and trade of gold products intended for export that began at the end of the previous year. However, production volumes of other key industrial sectors slowed down from the high levels of 2022-2023,” the forecast says.
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It is noted that the increase in the production of precious metals from gold by 4.6 times y/y in January – April offset the decline and slowdown in other major industrial sectors. Construction growth (+13.7% y/y in January–April) remained stable against the backdrop of a high level of mortgage lending (+23.3% y/y as of April). Generally, the level of lending to the population (+21.2% y/y in April), significant volumes of savings and a decline in consumer prices in the country supported domestic demand,” the forecast says.
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The economic growth of Armenia in the state budget for 2024 is envisaged at 7%. The Central Bank of Armenia expects the country's economic growth in 2024 to be in the range of 6.1-6.8%.
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The World Bank expects the Armenian economy to grow by 5.5% in 2024, and by 4.9% in 2025. The IMF predicts 5% growth for the Armenian economy in 2024. The EBRD forecasts economic growth in Armenia of 6.2% in 2024 and 4.8% in 2025. ADB forecasts are 5.7% for 2024 and 6% for 2025. According to the forecast of the Fitch Ratings agency, the economic growth of Armenia in 2024 will be 6%, and 4.9% in 2025. SP forecasts 6.2% growth for the Armenian economy in 2024, and the UN expects the Armenian economy to grow by 5.2% in 2024 and 4.8% in 2025.
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