Key Macroeconomic Indicators
According to Armenia’s Statistical Committee, economic activity rose by 4.4% in January–April 2025 compared to the same period in 2024. However, this growth masks some deeper structural challenges, particularly in industry and external trade.
Growth Forecasts by Institutions:
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ADB: 6.0%
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Fitch Ratings: 4.9%
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EBRD: 5.0%
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World Bank: 4.0%
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IMF: 4.5%
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UN: 5.2%
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EAEU Bank: 5.5%
Inflation:
Consumer prices rose by 2.7% in the first four months of 2025.
Sectoral Overview
Industrial Production:
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Down 16.1% (January–April 2025 vs. 2024).
This decline is alarming and reflects a stagnation in mining and energy-intensive sectors, signaling reduced foreign and domestic investment.
Construction:
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Up 15%
Stimulated by VAT exemptions on new home purchases and investment in urban development.
Agriculture:
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Up 10.5% in Q1 2025
Favorable weather and government subsidies in key regions boosted crop yields and livestock production.
Services:
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Up 11.5%
A growing tourism sector and recovery in domestic demand have supported expansion in retail, hospitality, and transportation.
Foreign Trade Crisis
One of the most concerning trends in 2025 is the 52.9% decline in Armenia’s foreign trade turnover, which now totals only $6.3 billion for the first four months of the year. This contraction is linked to:
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Lower re-exports to Russia
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Reduced demand for Armenian goods abroad
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Currency volatility in partner economies
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Geopolitical instability in the region
Financial Sector Outlook
Armenia’s financial system remains resilient, with stable levels of profitability, liquidity, and capital adequacy. The banking system continues to support economic activity, although lending has become more cautious amid external uncertainty.
Challenges Ahead
Despite moderate GDP growth, Armenia’s economy is grappling with:
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A narrow export base
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Energy dependency
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Declining productivity in industry
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Emigration of skilled labor
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Heavy reliance on remittances
The drop in industrial output and trade highlights the fragility of Armenia’s economic model. The government must urgently diversify production, enhance innovation, and invest in digital infrastructure.
Conclusion
Armenia’s economy in 2025 shows a dual nature — moderate growth, especially in construction and services, is offset by worrying signs in trade and industry.
Unless reforms are accelerated — especially in industrial modernization, education, and energy independence — current growth may prove unsustainable in the face of regional shocks and global economic shifts.
By Lida Nalbandyan, Founder and CEO of Octopus Media Group