Armenia flag Armenia: Economic and Political Overview

The economic context of Armenia

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) 19.5124.1625.4127.1529.15
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 6,5878,1538,5759,1639,837
General Government Gross Debt (in % of GDP) 49.250.553.153.753.8
Inflation Rate (%)
Unemployment Rate (% of the Labour Force) 13.012.513.013.514.0
Current Account (billions USD) 0.15-0.47-0.71-0.97-1.15
Current Account (in % of GDP) 0.8-1.9-2.8-3.6-3.9

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

Armenia's economy is diversified, encompassing agriculture, mineral exploitation, hydroelectricity, telecommunications, jewelry, and tourism. Agriculture accounts for 10.4% of GDP and engages 52% of the total workforce (World Bank, latest data available). Main crops include potatoes, tomatoes, grapes, wheat, melons, cotton, and tobacco. The livestock sector represents almost 40% of the country’s gross agricultural product. Armenia faces challenges due to limited arable land cultivation, fragmented plots, and low growth potential attributed to political instability. In 2023, Armenia's agriculture, forestry, and fishery sectors saw no growth compared to the previous year, generating products valued at slightly over USD 2.47 billion, according to the National Statistical Committee. Agriculture experienced a slight decline of 0.3% to approximately USD 2.35 billion. Livestock production dropped by 3.4% to around USD 1.24 billion, while crop production increased by 2.7% to approximately USD 1.11 billion. Forestry sector output rose by 22.3% to roughly USD 6.69 million, and fisheries output grew by 3.6% to around USD 136.04 million.

The industry contributes 25.3% of GDP and employs 14% of the total workforce. Armenia boasts deposits of copper, molybdenum, bauxite, zinc, lead, iron, gold, and mercury, forming the basis of its chemical industry sector and primary exports, especially metal ores. The mining sector, notably metal ores, is one of the largest contributors to GDP and exports. Armenia's well-developed hydroelectricity sector enables it to export electricity, although much of it is foreign-owned. The manufacturing sector alone accounts for 11% of GDP (World Bank). According to the National Statistical Committee (NSC), Armenia's industrial output in 2023 reached approximately USD 6.92 billion in current prices, marking a 4.1% increase compared to 2022.

Services represent 55.5% of GDP and employ 34% of the active population. The sector encompasses jewelry, boosted by the quality of its diamonds, and tourism. The ICT sector is also burgeoning and is prioritized by the government. The banking sector, particularly robust and stable, consists of 17 commercial banks (European Banking Federation). Armenia's Tourism Committee reported that in 2023, the country welcomed 2.3 million tourists, marking a 37.7% surge compared to 2022 and a 21.6% rise compared to 2019. Of the total, 50% arrived from Russia, 11% from Georgia, 6% from Iran, and 3% from the U.S..

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 30.3 17.5 52.2
Value Added (in % of GDP) 10.4 25.6 55.3
Value Added (Annual % Change) -0.7 9.4 17.7

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Country Risk

See the country risk analysis provided by Coface.

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Sources of General Economic Information

Ministry of Agriculture
Ministry of Energy and Natural Resources
Ministry of Economy
Statistical Office
National Statistical Service
Central Bank
Central Bank of the Republic of Armenia
Stock Exchange
Armenian Securities Exchange
Economic Portals
Armenian News Agency

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Latest Update: April 2024