Economic activity in Armenia is moderating towards its long-term growth potential after two years of rapid growth, says a flagship report by the European Bank for Reconstruction and Development (EBRD), published on 27 February.
Real GDP grew by 5.9 per cent year-on-year in the first three quarters of 2024 and an estimated 5.7 per cent for the year as a whole, down from 8.3 per cent in 2023, reflecting waning inflows of capital, the diminishing impact of high-skilled Russian migration, and slower growth in trade and ICT services.
Meanwhile, inflation remains well below the Central Bank of Armenia’s (CBA) revised target of 3 per cent (±1 per cent). Headline inflation stood at 1.7 per cent year-on-year in January 2025, and averaged 0.3 per cent in 2024, significantly lower than the 2 per cent recorded in 2023.
GDP growth is projected at 5 per cent in 2025 and 4.5 per cent in 2026. Public investment, IFI-backed projects, and infrastructure expansion will continue to support economic activity.
A potential breakthrough in border negotiations with Türkiye could strengthen Armenia’s position in East-West transit and boost regional trade integration.
However, geopolitical volatility remains the key downside risk, as delays in peace negotiations with Azerbaijan could undermine economic stability.
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