Armenia flag Armenia: Economic outline

Economic Outline

Economic Indicators

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 organisations, 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 reduced growth to a negative rate of 7.6% of GDP in 2020, reflecting the reliance on remittances. According to the IMF's latest estimates, GDP returned to growth in 2021 (+6.5%), driven by private consumption (about 80% of GDP), thanks to an increase in household income and remittances. Growth is expected to stabilize around 4.5% this year and the next (IMF).

According to IMF data, public debt represented 62.2% of GDP in 2021, much higher than the pre-pandemic level (50.1%). As the economy recovers, the ratio should gradually decrease to 60.1% this year and 58% in 2023. Despite the recovery in domestic activity, the budget deficit moderated only marginally in 2021 (-5.3% of GDP), thanks to robust exports and remittances. Inflation has been rising rapidly since the end of 2020 and stood well above the target of 4% (6.9% - IMF), due to the impact of the depreciation of the dram and the rise in commodity prices. Consequently, the CBA's key interest rate reached 7.25% in September 2021, marking an increase of 300 basis points since December 2020. This should contribute to a marginal decrease in 2022 (5.8%) and 2023 (4.6% - IMF). Economic challenges include low agricultural yields, dependence on Russia for exports and remittances, rising inflation, and high oil prices. Other significant challenges include geographic isolation, lack of infrastructure and a highly dollarized economy.

The unemployment rate increased to 18.5% in 2021. The IMF expects the unemployment trend to decrease slightly to 18.3% in 2022 and 17.8% in 2023. The latest figures from the World Bank show that the national poverty rate is estimated at 44%, while the GDP per capita (PPP) stood at USD 13,638 as of 2021.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 13.62e12.64e13.6115.0616.16
GDP (Constant Prices, Annual % Change) 7.6e-7.4e6.54.54.4
GDP per Capita (USD) 4,597e4,267e4,5955,0835,453
General Government Gross Debt (in % of GDP) 50.163.5e62.260.158.0
Inflation Rate (%) 1.41.2e7.27.66.0
Unemployment Rate (% of the Labour Force) 18.3e18.0e18.518.317.8
Current Account (billions USD) -1.00-0.48e-0.39-0.60-0.80
Current Account (in % of GDP) -7.4-3.8e-2.9-4.0-4.9

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

 

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Latest Update: July 2022

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