The strong concentration of Armenia's economic growth in a few sectors creates risks for the sustainability of the growth figures in the baseline forecast scenario. This is stated in the macroeconomic forecast of the Eurasian Development Bank (EDB).
"Armenia's high economic growth rates in the first half of 2024 are predominantly linked to the increased production and export of jewelry," the EDB report states.
It is noted that if this factor is short-term, the risks of significantly slower economic growth in 2024, compared to the baseline scenario, increase.
The report highlights significant risks such as the substantial slowdown in global economic growth and in key partner countries.
"High interest rates in developed countries and structural problems in the Chinese economy could lead to a significant reduction in consumer and investment activity," the report says.
A decrease in demand for energy resources will also affect the Russian economy. "Under such conditions, Armenia will face reduced external demand and remittances, increasing depreciation pressure on the Armenian dram," the report notes.
EDB experts also believe that the driver of Armenia's economic growth in 2022–2023 could become a risk to the economy. "The likelihood of capital and labor resource outflows poses a significant threat to the economy and the stability of the national currency.
A net outflow of cross-border transfers would primarily lead to a sharp depreciation of the national currency and a spike in prices (see EDB Macroeconomic Forecast 2023–2025 for more details)," the report states.
Earlier, in an exclusive interview with BMG, Armenia's Minister of Finance Vahe Hovhannisyan discussed the Ministry of Finance's forecasts for economic growth in Armenia in 2024. Hovhannisyan revealed that the Ministry had developed several scenarios for economic growth. However, based on its current assessment, the Ministry expects a growth rate of around 7% in the foreseeable future.
Armenia's economic growth is projected at 7% in the 2024 state budget, with inflation set at 4% (±1.5%).
