The Luys Analytical Foundation has presented a detailed analysis of Armenia's socio-economic development for the first seven months of 2024. The report highlights several concerning trends hidden behind seemingly positive economic indicators.
According to Luys, the growth of economic activity in Armenia is gradually slowing down. In July, the economic activity index was 6.2%, which is 0.8 percentage points lower than in June. For the period from January to July, the index reached 9.6%, also 0.8 percentage points lower than in the January-June period.
Luys experts note that the high growth rates this year have been primarily driven by the re-export of jewelry, the volume of which has sharply decreased. Excluding this sector, the country's overall exports have declined by 11.9%.
The analysts emphasize that the high growth rates recorded as a result of the global shocks of recent years have masked the development of deep problems in Armenia's economy, particularly the loss of potential in the export sector.
Luys draws attention to the fact that the growth in budget expenditures significantly exceeds the growth in tax revenues. While the presence of a deficit is planned in the state budget, the center’s analysts express concern over this trend.
The situation in the banking sector is of particular concern to Luys experts. In 2024, banks have primarily directed their assets toward consumer and mortgage lending. The volumes of these loans are growing much faster than economic growth, wage increases, and the rise in remittances.
At the same time, the volume of loans to industry is decreasing, indicating a lack of efforts to restore economic potential.
The Luys Analytical Center warns that the increasing household debt obligations could lead to serious problems in the medium term.
BMG reminds that the state budget for 2024 projects Armenia's economic growth at 7%, with inflation set at 4% (±1.5%).
