Introduction to Armenia’s Economic Forecast
The real GDP growth in Armenia is anticipated to hit 5% in 2025 and 5.5% in 2026, according to a report by the International Monetary Fund (IMF). This forecast is based on the visit of the IMF’s mission to Yerevan from September 17-30, led by Alexander Timan. The report also mentions that inflation is expected to remain close to the target set by the Central Bank of Armenia by the end of 2025.
Economic Growth and Risks
The economic growth in Armenia is driven by a resurgence in consumption and investment, alongside growth in tourism. The real GDP growth was 5.6% in the first half of the year, indicating robust economic activity. However, the report highlights that there are risks associated with this forecast, mainly linked to uncertainties stemming from ongoing global trade tensions, potential slowdowns among trading partners, and regional geopolitical risks.
Potential for Exceeding Expectations
The report suggests that growth may surpass expectations if net exports perform better than anticipated and "if the transport links related to the peace declaration are expedited." The peace declaration, signed in Washington on August 8 by the leaders of Armenia, the United States, and Azerbaijan, reinforced the commitment to execute the regional initiative "Trump Route for International Peace and Prosperity" (TRIPP).
Current Economic Situation
Employment growth has remained steady, while inflation saw a temporary rise to 3.7% (y/y) in September, primarily due to increases in food and service prices. Armenia’s state budget for 2025 anticipates economic growth of 5.1%. According to the Central Bank’s monetary policy report for the third quarter of this year, the GDP growth is projected to be between 5.8% and 5.7% by the end of 2025, 5.7% to 6.2% in 2026, and 5% to 6.3% in 2027.
Conclusion
In conclusion, the economic forecast for Armenia looks promising, with anticipated real GDP growth of 5% in 2025 and 5.5% in 2026. While there are risks associated with this forecast, the potential for exceeding expectations is also present. The country’s economic growth is driven by consumption, investment, and tourism, and the implementation of the peace declaration could further expedite growth. Overall, the economic situation in Armenia is robust, with steady employment growth and projected GDP growth in the coming years.
