GDP, current US$ billion
GDP per capita, current US$
|Life Expectancy at birth, years|
Despite several significant shocks in recent years, Armenia’s economy continues to perform well thanks to sound macroeconomic policies (active inflation targeting, adherence to prudent fiscal policy, and sound financial sector oversight). Armenia has also pursued significant reforms, particularly aimed at reducing corruption and increasing transparency. However, structural challenges persist, which results in weak productivity. These include low investment rates, weak attraction of FDI, limited human capital, an undiversified economic structure, and a narrow export base and export destinations.
In 2022, Armenia absorbed a significant inflow of migrants, businesses, and capital following Russia’s invasion of Ukraine. These developments fueled domestic demand and led to an appreciation of the currency; inflows of money transfers increased reserve levels and reduced credit dollarization. However, these positive developments are subject to a risk of reversal, which raises uncertainty in the economic outlook.
Inflation averaged 8.6 percent in 2022 compared to 7.2 percent in 2021. Fiscal performance was robust in 2022, with the budget deficit narrowing from 4.6 percent of GDP in 2021 to 2.2 percent in 2022. Driven by robust economic and fiscal performance and the appreciation of the AMD, government debt to GDP declined sharply from 60.3 percent in 2021 to 46.7 percent by end-2022.
Last Updated: Apr 07, 2023