GDP, current US$ billion
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Armenia has experienced significant socio-political and economic shocks in recent years. These events have included the 2018 Velvet Revolution, the 2020 twin shocks of the COVID-19 pandemic and the conflict with Azerbaijan, and more than 100,000 ethnic Armenians fleeing into the territory of Armenia in 2023.
Despite these challenges, the economy has continued to demonstrate resilience, which can be attributed to prudent macroeconomic policies, including active inflation targeting, adherence to fiscal responsibility, and effective oversight of the financial sector.
In the last five years, Armenia has made substantial development gains. In March 2023, Armenia became an IDA donor, only nine years after graduating from being an IDA recipient itself and four years after attaining upper-middle income (MIC) country status. Armenia has been actively engaged in wide range of reforms, including in the justice sector, healthcare, and social protection systems.
However, Armenia needs to unlock key constraints to achieve inclusive and sustainable growth. Operating in a turbulent and uncertain geo-political context, the country struggles with low investment rates, weak attraction of foreign direct investment, limited human capital, connectivity constraints both within Armenia and with other countries, and limited diversity in its export base and destinations. Armenia is also vulnerable to climate change.
In addition, Armenia has recently grappled with the arrival of over 100,000 displaced Armenians from Nagorno-Karabakh in September 2023, posing a significant challenge for the nation. The immediate challenge involves addressing the urgent humanitarian needs of the displaced population, including providing shelter, food, healthcare, and psychological support. Additionally, the country faces substantial uncertainty arising from geopolitical circumstances. Balancing the immediate needs of the displaced population with long-term development amidst uncertainty is a considerable challenge.
Last Updated: Oct 11, 2023