Armenia Economic Outlook
A small but resilient economy:
Armenia’s economy is primarily driven by services, mining, agriculture, and remittances from its large diaspora. Over the past decade, the country has made progress in diversifying its economy, improving infrastructure, and expanding trade. However, Armenia remains vulnerable to external shocks, particularly from geopolitical tensions with Azerbaijan and dependence on Russia for trade and energy.
Trade and remittance-driven growth:Armenia is heavily reliant on trade, with Russia being its largest economic partner. The country is a member of the Eurasian Economic Union (EAEU), which facilitates trade with Russia, Kazakhstan, and Belarus. Additionally, remittances from Armenian workers abroad, particularly in Russia and the U.S., play a crucial role in sustaining household incomes and domestic consumption. However, regional instability and sanctions on Russia pose economic risks.
Mining and technology sectors:Armenia’s mining industry, particularly copper and gold exports, contributes significantly to government revenue. In recent years, the country has also made strides in developing its tech sector, with Yerevan emerging as a hub for startups and IT services. The government has actively promoted investment in innovation and digital transformation to reduce reliance on traditional industries.
Armenia’s economic outlook:Armenia’s economy is expected to grow steadily, though risks remain. Geopolitical tensions with Azerbaijan, particularly over Nagorno-Karabakh, pose economic and security challenges. Inflation and external debt are concerns, but continued investment in technology, infrastructure, and diversification will be key to sustaining long-term economic growth.
Armenia's Macroeconomic Analysis:
Nominal GDP of USD 25.9 billion in 2024.
Nominal GDP of USD 25.8 billion in 2024.
Nominal GDP of USD 24.1 billion in 2023.
GDP per capita of USD 8,128 compared to the global average of USD 10,589.
GDP per capita of USD 8,754 compared to the global average of USD 10,589.
GDP per capita of USD 8,697 compared to the global average of USD 10,589.
Average real GDP growth of 4.8% over the last decade.
Average real GDP growth of 4.8% over the last decade.
Average real GDP growth of 4.6% over the last decade.
Sector Analysis
In 2022, services accounted for 59.0% of overall GDP, manufacturing 11.1%, other industrial activity 21.5%, and agriculture 8.4%. Looking at GDP by expenditure, private consumption accounted for 65.3% of GDP in 2023, government consumption 14.1%, fixed investment 21.3%, and net exports -0.7%.International trade
In 2023, manufactured products made up 48.2% of total merchandise exports, mineral fuels 0.9%, food 13.2%, ores and metals 15.0% and agricultural raw materials 0.4%, with other categories accounting for 22.3% of the total. In the same period, manufactured products made up 65.5% of total merchandise imports, mineral fuels 8.8%, food 10.1%, ores and metals 3.3% and agricultural raw materials 0.9%, with other goods accounting for 11.4% of the total. Total exports were worth USD 12.90 billion in 2024, while total imports were USD 15.20 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 4.6% in the decade to 2023. To read more about GDP growth in Armenia, go to our dedicated page.
Fiscal policy
Armenia's fiscal deficit averaged 3.2% of GDP in the decade to 2023. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 16.7% in the decade to 2023. For more information on Armenia's unemployment click here.
Inflation
Inflation averaged 2.7% in the decade to 2024. Go to our Armenia inflation page for extra insight.
Monetary Policy
Armenia's monetary policy rate ended 2024 at 7.00%, down from 8.50% a decade earlier. See our Armenia monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the dram strengthened by 19.5% vs the U.S. dollar. For more info on the dram, click here.
Economic situation in Armenia
Stronger domestic demand lifted annual GDP growth to 5.2% in Q1 (Q4 2024: +3.8% yoy). Private spending benefited from a healthy rise in real wages, and fixed investment from interest rate cuts and pro-market reforms. Expansionary fiscal policy added another tailwind. That said, the GDP reading was still one of the weakest in the post-Covid era. Exports fell by over half on a high base effect, a decelerating Russian economy plus an overvalued dram. In Q2, our panel sees the economy expanding at a similar pace to Q1, a prediction backed by a 5.4% increase in economic activity in April; construction—a key driver of growth in past years—rose robustly, outweighing a slowdown in retail sales. Nonetheless, the reading still suggests that GDP growth is returning to the levels seen before the invasion of Ukraine in 2022, which temporarily boosted capital and skilled Russian labor inflows.Armenia Economic Forecasts
Projections out to 2034.46 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 13 expert analysts.
Want to get insight on the economic outlook for Armenia in the coming years? FocusEconomics collects projections out to 2034 on 46 economic indicators for Armenia from a panel of 13 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Armenia economy. To download a sample report on the Armenia's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.