The World Bank has released its summary of Armenia’s economic performance for May and June, noting continued economic growth, softened inflation, and a decline in exports.
In May, economic activity rose by 10.4%, up from 5.4% in April. Cumulative growth for January–May reached 5.7%, driven by surges in construction (22.2%) and non-trade services (10.8%).
Industrial output dropped by 5.9%, though mining grew by 17.9%. Processing industry contracted by 13.5%, mainly due to a 9% fall in alcoholic beverage production and a nearly 70% drop in non-ferrous metal output—due to base effect from high figures in 2024.
Company registrations declined by 6.9% in May, with individual entrepreneurs and LLC registrations down by 7.6% and 4.7%, respectively.
Net non-commercial remittances rose by 19.5%, mostly due to a 48.3% increase in transfers from Russia. Inflows from the U.S. slightly decreased.
Inflation eased to 3.9% in June (from 4.3% in May), with food and non-alcoholic drinks up 6.2% and education costs climbing 7.8%. The Central Bank kept the refinancing rate unchanged at 6.75%.
Exports plunged by 39.3% in May (after a 56.6% drop in April), largely due to a 69.2% decline in precious and semi-precious stones and a 70.7% fall in vehicle exports. Imports also shrank by 20.4%.
Nonetheless, some exports rose: prepared food (21%), textiles (55.2%), and minerals (14.2%). Imports of precious metals fell 61.4%, but agricultural goods, oils, and food imports grew by 54%, 37%, and 35%, respectively.
Excluding re-exports of precious stones, exports and imports actually rose by 9.2% and 14.3% in May. Still, total exports and imports from January–May dropped by 57.4% and 42%, widening the trade deficit to 7% of GDP.
Gross international reserves increased by $145 million in June, reaching $4 billion—equivalent to 3.1 months of import cover. The dram depreciated by 0.1% against the U.S. dollar and by 3.7% against the euro in June, though it remains up 3% against the dollar for the year.
Commercial banks’ dram deposits and loans grew by 1% and 1.3% in May. Adjusted annual growth reached 13.6% and 27.9%, driven mainly by consumer lending.
The state budget recorded a deficit of 0.8% of GDP in May. Tax revenues rose by 14.1%, mostly from a 17.9% increase in VAT and a 72.5% jump in turnover tax. Expenditures grew by 28.2%, led by capital and defense spending. Current spending rose modestly by 3%, mainly from a 12.8% increase in pensions and social benefits.
This deficit brought the cumulative January–May budget shortfall to 0.2% of GDP.
