Armenia flag Armenia: Economic outline

Economic Outline

Economic Indicators

Armenia has experienced rapid economic growth in recent years, propelled by expatriate remittances, rising international copper prices, and a business-friendly monetary policy. The country benefits from abundant mining resources including molybdenum, zinc, copper, and gold, as well as financial support from international organizations. Membership in the Eurasian Economic Union (EAEU) and a partnership with the EU also contribute to its economic strengths. However, the economic crisis induced by the Covid-19 pandemic and the armed conflict with Azerbaijan over the Nagorno-Karabakh enclave dealt significant blows to growth, resulting in negative growth in 2020. Despite these challenges, Armenia's economy displayed resilience to recent shocks, including the Russian invasion of Ukraine. It achieved an estimated growth rate of 12.6% in 2022 and 7% in 2023, driven by an influx of foreign exchange, migrants, and businesses, primarily from Russia. The IMF projects a growth rate of 5% in 2024, supported by robust personal consumption and increased government spending and investment, with a subsequent moderation to 4.5% in 2025.

Fitch Ratings reports that Armenia plans to substantially increase fiscal spending in 2024 to accommodate the large influx of refugees from Nagorno-Karabakh. Despite implementing permanent revenue-raising measures, the fiscal deficit is expected to temporarily widen to 4.5% in 2024 before narrowing to 2.9% in 2025. By the end of 2023, the general government debt stood at approximately 47.9% of GDP. Benefiting from favorable budget performance and cash reserves, authorities repurchased USD 186.8 million of a USD 313.2 million Eurobond set to mature in 2025. The IMF anticipates the debt ratio to moderately expand to 49.5% by 2025. Inflation is expected to return to the central bank’s target of 4% by mid-2024, gradually rising and stabilizing around the target in the medium term.

The unemployment rate was estimated at 13.5% in 2023 by the IMF and is expected to remain relatively stable around 14% over the forecast horizon. The national poverty rate is estimated at 24.8%, with GDP per capita (PPP) at USD 18,942 (World Bank). Around 40% of the workforce is engaged in Armenia’s informal economy, accounting for 36% of the nation’s gross domestic product, according to a study by the European Training Foundation.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 19.5124.5426.9429.0031.08
GDP (Constant Prices, Annual % Change) 12.67.05.04.54.5
GDP per Capita (USD) 6,5878,2839,0919,78610,488
General Government Gross Debt (in % of GDP) 49.247.948.749.549.6
Inflation Rate (%) n/a3.54.04.04.0
Unemployment Rate (% of the Labour Force) 13.013.514.014.014.0
Current Account (billions USD) 0.15-0.33-0.61-0.81-1.00
Current Account (in % of GDP) 0.8-1.4-2.3-2.8-3.2

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Armenian Dram (AMD) - Average Annual Exchange Rate For 1 GBP 648.75621.25644.39600.50626.93

Source: World Bank, 2015

 

Return to top

Any Comment About This Content? Report It to Us.

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

Return to top