Armenia's Finance Minister Vahe Hovhannisyan announced that by the end of 2024, economic growth is expected to be around 6%, lower than the initially projected 7%.
In an interview with the state agency "Armenpress," Hovhannisyan noted that tax revenues in the first half of 2024 fell short of expectations by 117 billion drams (approximately $300 million), although they still showed growth compared to the previous year.
The Finance Minister emphasized that expenditures increased by 40 billion drams (over $100 million), with more than 20 billion drams (over $50 million) allocated to the capital expenses of the Ministry of Defense. He downplayed concerns about the shortfall in budget revenues, noting that the reserve fund has about 55 billion drams (approximately $141 million) available to cover potential risks.
Hovhannisyan pointed to the weakening of positive economic factors in recent years, such as capital inflows from Russia and export growth. According to him, Armenia's economy is returning to a potential growth rate of around 5.5%.
The minister also highlighted the revision of GDP data for 2023 and the first quarter of 2024 due to adjustments in value-added estimates related to gold re-exports. After the revision, GDP for the first quarter of 2024 stood at 1.92 trillion drams (over $4.9 billion).
Vahe Hovhannisyan reported that the budget deficit has exceeded the planned level by 11 billion drams (around $30 million), explaining that this was due to the traditional increase in expenditures in the third and fourth quarters. He expressed confidence that by the end of the year, the deficit would remain within the planned level of around 483 billion drams (over $1.2 billion).
In conclusion, the Finance Minister noted that despite some challenges, the overall budget indicators remain positive, with improvements in the expenditure side and redistribution of budget funds.
Earlier, BMG reported that the Statistical Committee of Armenia announced a revision of the country's gross domestic product (GDP) figures for 2023 and the first quarter of 2024. The adjustment is related to the reclassification of economic activities and the clarification of data for the last months of 2023 and the beginning of 2024.
According to the updated data, Armenia's GDP for 2023 amounted to 9.45 trillion drams (about $24.3 billion), which is 52 billion drams ($133 million) less than the initial estimate. The GDP volume index decreased by 0.4 percentage points to 108.3%.
The figures for the first quarter of 2024 were also revised. GDP for this period decreased by 48.3 billion drams (over $124 million) to 1.922 trillion drams (over $4.9 billion). The volume index decreased by 2.6 percentage points to 106.6%.
Armenia's economic growth in the 2024 state budget is projected at 7%, with inflation expected at 4% (±1.5%).
