Economic Overview
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Armenia has been growing at a fast pace in recent years. Expatriate remittances, an increase in international copper prices, and a business-friendly monetary policy aided the country's economic development. Other strengths include major mining resources (molybdenum, zinc, copper, gold), financial support from international organizations, considerable foreign exchange reserves, and membership in the Eurasian Economic Union (EARU) as well as a partnership with the EU. However, the economic crisis caused by the Covid-19 pandemic and the armed conflict with Azerbaijan over the Nagorno-Karabakh enclave severely affected growth, which turned negative in 2020. Despite that, Armenia’s economy has shown resilience to recent shocks – including the Russian invasion of Ukraine – and grew by an estimated 7% in 2022), driven by large inflows of external income, capital, and labour into the country. Amid tighter global financial conditions and weaker external demand, the IMF expects growth to decelerate to 3.5% this year and 4.4% in 2024.
According to IMF data, public debt represented 52.3% of GDP in 2022, returning around the pre-pandemic level, and should remain stable over the forecast horizon. External debt decreased both in dollar and dram terms, as the national currency appreciated 22% over the year, becoming the world's top-performing currency. The state budget for 2023 forecasts a deficit of 3.1% of GDP: expenses for the year are planned at AMD 2 trillion 590 billion (27.8% of GDP), or 18.3% more than in the approved budget for 2022, while revenues should also grow to AMD 2 trillion 204 billion. Inflation has increased to 8.5% in 2022 on the back of supply and demand shocks and the Central Bank has raised the policy rate by 625 basis points aiming to steer inflation toward its medium-term target of 4%. According to the IMF forecast, the inflation rate should gradually decrease to 7% in 2023 and 5% in the following year. Armenia’s economy continues to face structural challenges, such as the need for further improvement in the business and investment environment, high unemployment, lingering labour skills mismatches, and weak firm competitiveness. Significant structural reforms have taken place in the areas of public financial management, revenue administration, the financial sector, and governance (IMF).
The unemployment rate was estimated at 15.2% in 2022 by the IMF and should remain relatively stable over the forecast horizon. The latest governmental figures show that the national poverty rate is estimated at 26.5%, while the GDP per capita (PPP) stood at USD 16,798 as of 2022.
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 12.64 | 13.86 | 19.50 | 23.73 | 25.12 |
| GDP (Constant Prices, Annual % Change) | -7.2 | 5.7 | 12.6 | 5.5 | 5.0 |
| GDP per Capita (USD) | 4,269 | 4,679 | 6,584 | 8,008 | 8,478 |
| General Government Gross Debt (in % of GDP) | 63.5 | 60.2 | 49.3 | 49.3 | 50.2 |
| Inflation Rate (%) | 1.2 | 7.2 | 8.7 | 7.1 | 5.0 |
| Unemployment Rate (% of the Labour Force) | 18.2 | 15.3 | 12.5 | 12.5 | 13.0 |
| Current Account (billions USD) | -0.48 | -0.52 | 0.02 | -0.41 | -0.84 |
| Current Account (in % of GDP) | -3.8 | -3.7 | 0.1 | -1.7 | -3.3 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
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