In the first quarter of 2024, economic activity in Armenia continued to demonstrate high performance. This fact is mainly attributed to the growth in manufacturing, trade, and construction, as reported in the Central Bank's transparency report for January-March.
The trade and construction sectors remain key drivers of economic growth. Discussions on the transparency report for 2023-2024, held at the end of April, drew attention to recent trends in manufacturing and export in the manufacturing industry. However, there was highlighted uncertainty regarding the sustainability of this growth and risks associated with the structure of economic development.
Moreover, the Council noted that some slowdown in the information and communication sector's growth since the end of 2023 could negatively affect GDP potential and the formation of export opportunities, although signs of widespread contraction are still absent, and production volumes remain high.
In the first quarter of 2024, external demand for domestic services continued to decline, partly due to the slowdown in tourism growth, which affected average spending and the flow of tourists arriving in Armenia. At the same time, the Council emphasized that uncertainty in domestic demand conditions remains high.
Earlier, BMG reported that economic activity in Armenia grew by 15.3% in March 2024, according to the Statistical Committee's data. Overall, for the first quarter of 2024, this indicator reached 14.3%. The industry became the main driver of economic growth in March, increasing by 33.5%. Trade turnover also showed significant growth, reaching 30.4%, while construction and services grew by 13.1% and 4.7%, respectively.
Experts note that the sharp rise in economic activity is largely due to the high dynamics in the industrial sector, which, in turn, is explained by the re-export of Russian gold and precious stones from Armenia to the United Arab Emirates and Hong Kong.
This raises concerns about the sustainability and long-term nature of economic growth since it is highly dependent on external factors, and its stability may be threatened by changes in external conditions.
