Armenia Economic Outlook

November 26, 2019

Economic growth accelerated to 7.9% year-on-year (yoy) in the third quarter (Q2: +6.9% yoy), marking the fastest expansion since Q1 2018. Domestic activity rebounded strongly in the third quarter, largely underpinned by a solid rise in fixed investment. Moreover, the external sector contributed positively to growth as exports of goods and services jumped in the third quarter, defying the weak global backdrop and logging the quickest expansion in nearly two years. Meanwhile, private consumption remained robust amid rising household incomes, despite easing somewhat compared to the previous quarter. On the supply side, the third quarter’s acceleration largely reflected swifter growth in the industrial and construction sectors compared to the previous quarter.

Armenia Economic Growth

Economic activity is expected to moderate next year; however, it should remain sturdy amid rising wages, relatively contained inflationary pressures and loose monetary policy. Risks to the outlook are the large current account deficit, elevated levels of external debt and subdued commodity prices. Our panelists see the economy growing 4.8% in 2020, which is unchanged from last month’s outlook, and 4.7% in 2021.

Armenia Economy Data

	2013	2014	2015	2016	2017
Population (million)	3.0	3.0	3.0	3.0	3.0
GDP per capita (USD)	3,720	3,966	3,574	3,569	3,859
GDP (USD bn)	11.1	11.8	10.7	10.7	11.5
Economic Growth (GDP, annual variation in %)	3.3	3.6	3.2	0.2	7.5
Consumption (annual variation in %)	0.9	1.0	-7.8	-1.1	12.4
Investment (annual variation in %)	-7.0	-2.2	2.5	-11.4	9.7
Industrial Production (annual variation in %)	7.3	2.6	5.1	6.8	12.6
Unemployment Rate	16.2	17.8	19.5	17.1	18.0
Fiscal Balance (% of GDP)	-1.6	-1.9	-4.8	-5.5	-4.8
Public Debt (% of GDP)	40.8	43.7	48.7	56.8	58.8
Money (annual variation of M2 in %)	14.9	-3.5	5.2	24.8	28.9
Inflation Rate (CPI, annual variation in %)	5.8	3.0	3.7	-1.4	1.0
Policy Interest Rate (%)	7.75	8.50	8.75	6.25	6.00
Exchange Rate (vs USD)	405.3	463.5	482.9	482.8	483.2
Exchange Rate (vs USD, aop)	409.6	415.9	477.9	480.5	482.7
Current Account (% of GDP)	-7.3	-7.6	-2.7	-2.0	-3.0
Current Account Balance (USD bn)	-0.8	-0.9	-0.3	-0.2	-0.3
Trade Balance (USD billion)	-2.2	-2.1	-1.2	-0.9	-1.4
Exports (USD billion)	1.6	1.7	1.6	1.9	2.4
Imports (USD billion)	3.8	3.8	2.8	2.8	3.8
Exports (annual variation in %)	7.9	3.8	-4.4	16.4	26.2
Imports (annual variation in %)	5.6	-2.0	-25.1	0.9	32.6
International Reserves (EUR)	1.6	1.2	1.6	2.1	1.9
External Debt (% of GDP)	78.8	72.1	83.5	93.2	91.2

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Armenia Facts

	Value	Change	Date
Stock Market	0.1	0.0 %	Nov 21

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