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Armenia Economic Forecast

Armenia Economic Outlook

National accounts data revealed that annual economic growth slowed to 12.8% in Q4 from Q3’s 14.8%. Private consumption growth weakened, likely due to fading demand from the recent wave of Russian migrants. On the flip side, public spending accelerated, while fixed investment picked up despite higher interest rates. In Q1, high-frequency data suggests that momentum is cooling further. Economic activity ticked down in January, as growth in both industrial output and retail sales weakened. On 10 February, Fitch Ratings affirmed the country’s B+ rating and upgraded the outlook to positive, citing robust growth and healthier external finances. Meanwhile, despite an International Court of Justice ruling to allow free movement and the mediation of the Russian President, the Lachin corridor—a key road between Armenia and Nagorno-Karabakh in neighboring Azerbaijan—remained blocked in February.

Armenia Inflation

Inflation was unchanged at 8.1% in February. Softer rises in prices for housing and utilities, as well as transportation, offset faster increases in food and clothing prices. Lower inflation in recent months, coupled with slowing regional and global economic activity, led the Central Bank to hold rates at 10.75% at its 31 January meeting.

Armenia Economic Data

2017 2018 2019 2020 2021
Population (million) 3.0 3.0 3.0 3.0 3.0
GDP (USD bn) 11.5 12.5 13.6 12.6 13.9
GDP per capita (USD) 3 4 4 4 4
GDP (EUR bn) 10.2 10.6 12.0 10.6 11.8
GDP per capita (EUR) 3 3 4 3 3
GDP (AMD bn) 5 6 6 6 6
Economic Growth (Nominal GDP, ann. var. %) 9.8 8.1 8.7 -5.5 13.0
Economic Growth (GDP, ann. var. %) 7.6 5.2 7.7 -7.2 5.7
Private Consumption (ann. var. %) 13.7 4.9 11.5 -13.8 3.6
Government Consumption (ann. var. %) -2.1 -3.1 12.9 9.2 8.4
Fixed Investment (ann. var. %) 9.7 4.8 4.4 -1.5 6.3
Industrial Production (ann. var. %) 12.3 4.2 9.0 -0.9 3.3
Unemployment (% of active population, aop) 20.7 20.4 19.0 17.9 15.3
Fiscal Balance (% of GDP) -4.8 -1.6 -0.8 -5.1 -4.6
Public Debt (% of GDP) 53.7 51.2 50.1 63.5 60.3
Money (ann. var. of M2 %) 28.9 13.2 21.5 14.8 12.8
Inflation (CPI, ann. var. %, aop) 1.0 2.5 1.4 1.2 7.2
Refinancing Rate (%, eop) 6.00 6.00 5.50 5.25 7.75
Exchange Rate (AMD per USD, eop) 483 485 478 519 485
Exchange Rate (AMD per USD, aop) 483 483 480 489 504
Exchange Rate (AMD per EUR, eop) 580 554 537 635 552
Exchange Rate (AMD per EUR, aop) 545 567 545 586 593
Current Account Balance (USD bn) -0.2 -0.9 -1.0 -0.5 -0.5
Current Account Balance (% of GDP) -1.5 -7.4 -7.3 -3.8 -3.7
Merchandise Trade Balance (USD bn) -1.4 -1.8 -1.7 -1.4 -1.5
Merchandise Exports (USD bn) 2.4 2.7 3.4 2.7 3.3
Merchandise Imports (USD bn) 3.8 4.5 5.1 4.1 4.8
Merchandise Exports (ann. var. %) 26.2 14.1 23.3 -19.1 20.5
Merchandise Imports (ann. var. %) 32.2 18.3 13.3 -19.3 16.6
Foreign Direct Investment (USD bn) 0.3 0.3 0.1 0.0 0.4
International Reserves (USD bn) 2.3 2.3 2.8 2.6 3.2
International Reserves (months of imports) 7.3 6.0 6.7 7.7 8.1
External Debt (USD bn) 10.5 10.9 12.4 12.9 13.8
External Debt (% of GDP) 91.3 87.7 90.9 102.1 99.9

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