WB: Armenia facing economic slowdown as tourism, remittances fall

Economic growth in Armenia slowed to 5.6% year-on-year in August, down from 6.2%, according to the World Bank.

The report highlights that annual inflation eased to 0.6% in September, Caliber.Az reports.

Re-exports of gold and jewellery remained a major driver of export growth, despite a decline in volumes.

Moreover, tourism revenues suffered a significant decline in the first half of 2024, with tourist arrivals down by 6.1% year-on-year and average spending per visitor dropping by 25%. Additionally, remittance inflows saw a steep 28% decrease.

Meanwhile, economist Vardan Bostanjyan identified critical challenges within Armenia's economic structure, highlighting concerns in the national budget, which is anticipated to receive 630 billion drams ($1.5 billion) in 2024, a figure impacted significantly by tax exemptions.

However, he noted that these benefits are mostly directed at low-value industries, such as water bottling, rather than fostering growth in high-tech or value-added sectors.

Bostanjyan described Armenia’s economy as underdeveloped, with minimal industrial activity and a struggling agricultural sector, indicating fundamental weaknesses in economic strategy.

He criticised the flow of foreign capital into Armenia as insufficient for development, warning that without diversified, strategic economic reform, Armenia’s long-term growth is jeopardized.

Bostanjyan further expressed concerns over Armenia’s strained security alliances, urging the government to shift from rhetoric to practical reforms to ensure both economic and security stability.

By Aghakazim Guliyev