Armenian Finance Minister predicts 6% GDP growth by end of 2024

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YEREVAN, August 27. /ARKA/. Armenia's Finance Minister, Vahe Hovhannisyan, forecasts that the country's GDP will grow by approximately 6% by the end of 2024./pp

In an interview with Armenpress published Tuesday, Hovhannisyan mentioned that although the 2024 state budget law sets a target of 7% economic growth, various developments over the next four months could affect the final outcome./pp

Hovhannisyan highlighted that Armenia's economy has experienced positive shocks over the past two to three years, driven by a significant influx from Russia, a sharp increase in exports, and some re-exports. However, these factors have started to diminish, and the country is gradually returning to its potential growth range, which was previously around 4%. Due to the policies implemented in recent years, this potential is now estimated at about 5.5%./pp

The Finance Minister reported that tax revenues for the first half of 2024 were 117 billion drams below the forecast, although they still exceeded last year's figures. Hovhannisyan noted that budget expenditures are being executed effectively. He explained that some of the events anticipated during last year's budget preparations did not fully materialize, partly because the complete picture of the 2023 GDP and its structure was not yet available./pp

Hovhannisyan emphasized that various scenarios are considered during the budget forecasting process, which ensures certain budget buffers. We have a Reserve Fund for this purpose, and its resources are used in case of risk materialization. Currently, our Reserve Fund amounts to around 55 billion drams, which is sufficient to mitigate or fully neutralize potential issues that may arise if tax collections fall short, he assured./pp

Hovhannisyan also stated that the country’s public debt has increased by approximately 443 million drams (just over $1 billion) compared to the first half of the previous year. He described this as a planned process./pp

We had forecasted a public debt-to-GDP ratio of 48.4% in the budget, but according to our current projections, the debt is expected to be around 50% by the end of this year, Hovhannisyan concluded./p br br