Trade restrains the growth of economic activity. “light”

“Luys” Foundation analyzed the socio-economic developments of the RA economy in 2026. in January-April.

Thus.

2026 In the months of January-April, the economic activity continued to be maintained at a relatively high level, but there are signs of slowing down in the growth structure. In April, the growth of the economic activity index was around 7.1%, slightly accelerating compared to March, but the cumulative growth decreased to 6.9%, compared to 7.1% in January-March. The main drivers of growth are industry and services, while weak trade dynamics continue to limit faster growth in economic activity. This proves that the high growth of economic activity is maintained, but its structure has become more unbalanced.

The growth of the industry recovered somewhat in April, but the dynamics of the sector remains unstable. The growth of industrial output in April was 11.7%, as a result of which the cumulative growth of January-April was 13.0%, remaining close to the level of 13.4% in January-March. At the same time, the sector’s growth continues to be significantly influenced by individual subsectors and short-term factors, including high growth in mining and base metal production. The high growth of the latter is largely due to factors related to re-exports and may stop or decline sharply at any time.

The dynamics of foreign trade worsened again in April, confirming the unstable nature of the increases recorded in previous months. Export volumes decreased by 25.9% in April, as a result of which the cumulative indicator for January-April became negative, making -3.3%, against the 6.4% growth of January-March. Import growth has also weakened. In April, imports decreased by 5.8%, and cumulative growth slowed to 2.5%. This proves that the recovery of foreign trade in the previous months was not stable and continues to depend mostly on factors related to individual product groups and re-exports.

The inflationary environment has become more worrisome as inflation continued to accelerate in April. 2026 In April, the 12-month inflation reached 5.3% against 4.5% in March. The acceleration of inflation is mainly due to the increase in the prices of food and transport services. In these conditions, despite the strengthening of inflationary pressures, the Central Bank kept the refinancing rate at 6.5% at the beginning of May, which shows that the position of the monetary policy has not been tightened yet.

 In the fiscal sector, revenue growth has been maintained, but the structure of expenditures remains a concern, especially due to the reduction of capital expenditures. 2026 In January-April, the total revenues of the state budget increased by 13.7%, and tax revenues by 14.4%. At the same time, the 7.6% increase in general expenses was mainly due to the 14.7% increase in current expenses, while capital expenses decreased by 41.3%. This means that the budget spending policy continues to be dominated by the expansion of current expenditures, and capital expenditures do not fully fulfill their role in increasing the quality and long-term potential of economic growth.

High growth rates in the construction sector and high credit growth continue to support domestic demand, but at the same time may increase macroeconomic risks. The cumulative growth of construction in January-April reached 22.9%, and the volume of loans provided to the construction sector increased by 23.6% (by 168.3 billion drams) compared to the same period last year. The combination of high growth in the construction sector and expansion of lending to construction calls for additional attention, especially in terms of potential risks around real estate market demand and future price dynamics.

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