Gayane Avagyan

Type of the article: Research Article

Abstract
Real GDP growth alone does not reveal whether economic expansion is productive, resilient, inclusive, institutionally grounded, or environmentally sustainable. This study develops a Directional Growth-Quality Conditions Index (DGQCI) for Armenia for 2003–2023. The composite contains 22 indicators in six dimensions: sources of economic growth, macroeconomic stability, human capital, structural transformation and innovation, institutional development, and inclusiveness and sustainability. Six context-dependent series (private and government consumption contributions, the real effective exchange rate, reserves, the current-account balance, and FDI/GDP) remain diagnostics but are excluded from aggregation. Publication requires at least 80% total indicator coverage and at least 50% of the intended indicators within every dimension; a stricter two-thirds rule is tested separately. Real GDP growth and the breadth of favorable growth-quality movements diverge substantially. Human capital has the highest average directional score, while inclusiveness and sustainability have the lowest. Results are highly stable to alternative weights, robust to a constant 16-indicator information set and to reassigning poverty to the inclusiveness dimension, but materially less concordant under magnitude-sensitive scoring. The DGQCI is therefore a directional monitoring tool, not a cardinal measure of welfare, causal policy impact, or the magnitude of socioeconomic progress.