An analysis by the Luys Foundation on Armenia's socio-economic development in the first half of 2024 reveals alarming trends in the industrial sector. Despite impressive growth at the beginning of the year, industrial growth rates sharply declined by June 2024, reaching only 1.4% compared to an average of 29.2% in the first three months.
Experts from the Luys Foundation Assess 2024 Trends
Particularly concerning is that last June, the sector experienced a downturn, which should have led to accelerated growth this year due to the base effect. Experts from the Luys Foundation note that without last year's downturn, growth this year could have been even lower.
"As we noted last month, the low growth rates in the sector are likely to persist in the coming months," the report states.
From January to May, industrial growth was primarily driven by a 33.7% increase in the manufacturing sector, contributing 21.7 percentage points to overall growth. This increase was largely due to a fourfold rise in the production of basic metals, which also contributed 21.7 percentage points to the total growth.
Positive and Negative Contributions to Manufacturing
Other subsectors also contributed positively, including electrical equipment production (59.9%) and tobacco products (5.0%), adding 0.5 and 0.3 percentage points to overall growth, respectively. However, this was offset by negative results in subsectors such as food production (-1.4%), printing activities (-9.5%), and machinery repair and installation (-35.7%).
Decline in Mining and Other Trends
Another significant trend is the deepening decline in the mining industry. From January to May, the decline was 8.8% compared to 7.2% from January to April, reducing overall growth by 1.75 percentage points.
The electricity, gas, steam, and air conditioning supply sector grew by 13.3%, adding 1.9 percentage points to overall industrial growth. Water supply, sewerage, and waste management grew by 5.7%, contributing 0.1 percentage points to growth.
