In May 2024, the economic activity index reached 5.2%, which is 4.8 percentage points lower than the previous month, resulting in a slowdown in economic activity from January to May to 11.2%.
The "Luys" Foundation, specializing in economic analysis, conducted an analysis of Armenia's socio-economic development from January to May 2024.
According to experts at the "Luys" Foundation, the slowdown in economic activity is mainly attributed to a sharp decline or cessation of jewelry activities, which was an expected phenomenon since this sector, despite contributing to high economic growth, is inherently unstable and can abruptly halt due to external factors, as it did in May.
As a result of the sharp decline in jewelry activities, the growth rates of exports and imports also slowed down. Tax revenue growth rates also sharply declined, almost reaching zero growth in May - 0.8% (and 0.2% considering income tax refunds).
Consumer credit growth rates continue to accelerate. Consumer credit growth rates in 2024 were quite high and continued to accelerate in recent months, reaching 24.9% in May.
Considering the slowdown and significantly lower economic activity growth rates, as well as wage growth, high loan growth is problematic and may pose risks to stability in the medium term.
Earlier, BMG reported that in May 2024, economic activity in Armenia grew by 5.2% compared to the same month last year, more than halving the year-to-date figures that exceeded 10%.
Industrial growth has significantly slowed, especially in manufacturing, where earlier there was double-digit growth, largely due to the re-export of Russian gold. These data indicate that the sector is experiencing a "cooling-off" phase after a six-month period of excessive growth, which many economists referred to as a "gold rush."
