Assessment of the Impact of Tourism on Macroeconomicindicators: Empirical Research for Armenia

This study assesses the impact of tourism on the economy of Armenia. Hypotheses were proposed, the reliability of which was tested by multivariate regression and Vector Autoregression (VAR) models. A Granger causality test was applied, according to which tourism revenue is the cause of changes in private consumption, and the reverse is not true. There is no Granger causality between the other variables. The interactions between tourism, economic growth and private consumption, as well as the dynamic effects of random shocks on these variables, were evaluated using the VAR model. According to the results of models, the development of tourism contributes to the appreciation of Armenia's national currency. Tourism has a significantly positive impact on Armenia’s economic growth, private consumption, and imports of goods and services. Specifically, a 1% increase in tourism revenue: a) boosts private consumption by an average of 0.032% in the current quarter and 0.03% two quarters later, b) raises imports by an average of 0.06 percentage points in the current quarter, and c) leads to a 0.04% increase in economic growth in the current quarter.