Based on the data published by the Statistical Committee of the Republic of Armenia, the “LUYS” Foundation analyzed the socio-economic developments of the RA economy in 2023. in January-August.
The growth rate of economic activity has somewhat accelerated in 2023. in August due to developments in the services and trade sectors. 2023 The high rate of economic growth recorded in the first months was due to the positive factors caused by the escalation of the Russian-Ukrainian conflict at the beginning of last year, the impact of which is gradually decreasing with an increase in services and trade as a result of tourism, or may be the result of one-off factors.
Developments in the industry sector are becoming more worrying. The industry sector has been recording declines for the past 3 months. Moreover, as shown by the previous June and July figures, it is not only a decline in the fields of mining, but also in the processing industry, which is more dangerous. This situation speaks of the decline of the potential and competitiveness of the RA economy, which is also caused by the behavior of the exchange rate.
The rate of inflation continued to be in the negative range. After a long period of high inflation, a drop was recorded in June-August, which was naturally lower than the Central Bank’s target. Responding to the situation, the Central Bank of Armenia has already reduced the refinancing rate by 1.0 percentage points, which is necessary. will contribute to the stimulation of aggregate demand in the economy and the return of inflation to the target.
The rate of export growth has slowed down significantly in recent months, which may be due to the decrease in the price competitiveness of RA products in 2023. In August, the export growth was 6.1%, which is significantly lower than the growth in July. The growth rate in January-August also slowed down, being 10.9 percentage points lower than the growth in January-July. It is also important to note that the growth rate is significant the slowdown in the export growth rate of the “prepared food products” product group (from 17.7% in January-June) also plays a role in January-July it became 13.0%), the contribution of which decreased by 1.0 percentage points.
The implementation of the state budget continues to deviate from the planned level. In particular, a significant surplus is recorded instead of the planned deficit, which is also due to the underperformance of the budget, especially capital expenditures. In January-August, 189.3 capital expenditures in the amount of AMD billion, while the January-June plan amounts to 214.9 billion AMD The importance of spending in terms of the economy’s potential and long-term growth has been discussed many times, but the issue of their performance remains relevant.