Armenia Economic Outlook

September 3, 2019

The economy continued to grow soundly in the second quarter, expanding 6.5% annually, although momentum eased from the first quarter’s 7.2% increase. Household spending soared in Q2 thanks to strong wage growth and revived confidence after the political transition. However, fixed investment and government spending both contracted, weighing on domestic activity. Available data for the third quarter is largely positive, with economic activity jumping in July thanks to a pick-up in trade and services activity. On a positive note, Moody’s upgraded the government’s debt rating to Ba3 on 27 August, thanks to improved economic diversification and market-friendly policies.

Armenia Economic Growth

Rising wages and recovering confidence should keep the economy growing at a healthy pace this year. However, soft activity in key trading partners and subdued commodities prices should cause growth to easing slightly from 2018’s result. Our panelists see the economy growing 5.1% in 2019, which is up 0.3 percentage points from last month’s forecast, and 4.7% in 2020.

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 %	Sep 04

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