Armenia's economic activity in October 2024 decelerated to 4.2%, marking the lowest rate in a year and a 2.8 percentage point decline compared to September. This conclusion comes from the latest socio-economic analysis by the "Luys" Foundation, covering the period from January to October 2024.
Analysts highlight that positive performance in industry and exports is largely driven by the jewelry sector, which mainly engages in re-export activities. Excluding this sector, the outlook becomes concerning: industrial output contracted by 0.4%, and exports fell by 8.4%.
Monetary policy outcomes appear mixed. Despite the Central Bank reducing the key interest rate by 2 percentage points over the year, the annual inflation rate remains at zero. Analysts attribute this to weak internal demand and modest price growth for imported goods.
The state budget situation raises additional concerns. The fiscal deficit is expanding rapidly, and the actual GDP growth for 2024 is likely to fall significantly below the 7% target set in the budget. The government has already revised its growth forecast downward. If current trends in revenues and expenditures persist, the budget deficit could exceed planned levels as a percentage of GDP, leading to a rise in public debt beyond projections.
Given the high base from late 2023, experts anticipate a further slowdown in economic activity over the last two months of the year.
