Economic and Political Overview

flag Armenia Armenia: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

Armenia has experienced rapid economic growth in recent years, propelled by expatriate remittances, rising international copper prices, and a business-friendly monetary policy. The country benefits from abundant mining resources including molybdenum, zinc, copper, and gold, as well as financial support from international organizations. Membership in the Eurasian Economic Union (EAEU) and a partnership with the EU also contribute to its economic strengths. Despite challenges (including the Russia-Ukraine conflict), GDP growth was sustained in 2024, at 6%, driven by robust domestic demand, including the ongoing acceleration of public investment. With slowing goods exports, tourism, and declining financial inflows, Armenia's growth is projected to decelerate to 4.9% in 2025. Gradual fiscal consolidation and normalized credit growth are expected to guide economic activity, with growth stabilizing at its potential rate of 4.5% (IMF).

Concerning public finances, the fiscal deficit was projected to rise to 4.7% of GDP in 2024, driven by refugee support, high domestic interest payments, and substantial capital expenditures. The 2025 fiscal deficit target is set at 5.5% of GDP to accommodate urgent spending, prioritizing national security and refugee integration. Social assistance, housing, pensions, education, health, and regional development remain key focuses while spending on goods and services will be further rationalized. The rollout of Universal Health Insurance and the new family benefits system will be delayed. Conversely, the debt-to-GDP ratio increased to % in 2024 (from 50.7% one year earlier) and should increase marginally to 56.6% by 2026 (IMF), as debt dynamics are highly exposed to currency risk (as of October 2024, 48.6% of the debt was foreign-exchange-denominated). In 2024, the consumer price index increased 0.3% y-o-y, although inflation is expected to gradually rise toward the 4% target in the medium term given monetary easing, with transportation costs and above potential growth also expected to exert inflationary pressures (IMF).

The unemployment rate was estimated at 13% in 2024 by the IMF and is expected to remain relatively stable at around 14% over the forecast horizon. The national poverty rate is estimated at 23.7%, with GDP per capita (PPP) at USD 23,376. Around 40% of the workforce is engaged in Armenia’s informal economy, accounting for 36% of the nation’s gross domestic product, according to the World Bank's Informal Economy Database.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 24.0925.2526.5827.4228.94
GDP (Constant Prices, Annual % Change) 8.36.04.94.54.5
GDP per Capita (USD) 8,1268,5188,9659,2479,760
General Government Gross Debt (in % of GDP) 50.752.455.656.657.4
Inflation Rate (%) 2.00.23.14.04.0
Unemployment Rate (% of the Labour Force) 12.613.013.514.014.0
Current Account (billions USD) -0.56-1.07-1.27-1.37-1.44
Current Account (in % of GDP) -2.3-4.2-4.8-5.0-5.0

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Armenia's economy is diversified, encompassing agriculture, mineral exploitation, hydroelectricity, telecommunications, jewellery, and tourism. Agriculture accounts for 8.5% of GDP and engages 52.3% of the total workforce (World Bank, latest data available). Main crops include potatoes, tomatoes, grapes, wheat, melons, cotton, and tobacco. The livestock sector represents almost 40% of the country’s gross agricultural product. Armenia faces challenges due to limited arable land cultivation, fragmented plots, and low growth potential attributed to political instability. In 2024, the gross volume of production in Armenia's agriculture, forestry, and fish farming sectors totalled ARD 1,020,542.8 million at current prices, up 0.9% from 2023, according to the National Statistical Committee. Agricultural production grew by 1.6% to ARD 958,804.3 million, with animal husbandry rising 2.2% to ARD 503,237.2 million and crop production increasing 0.9% to ARD 455,567.1 million. The country sold 183.8 thousand tons of meat (live weight) to slaughterhouses, up 4.6%, while milk production fell 0.9% to 574.4 thousand tons, and egg production declined 1.5% to 721.2 million.

The industry contributes 23.4% of GDP and employs 14.1% of the total workforce. Armenia boasts deposits of copper, molybdenum, bauxite, zinc, lead, iron, gold, and mercury, forming the basis of its chemical industry sector and primary exports, especially metal ores. The mining sector, notably metal ores, is one of the largest contributors to GDP and exports. Armenia's well-developed hydroelectricity sector enables it to export electricity, although much of it is foreign-owned. Overall, the manufacturing sector alone accounts for 11% of GDP (World Bank). In the first ten months of 2024, Armenia's industrial output reached USD 5.98 billion, up 11.7% from the same period in 2023, according to the Statistical Committee. Growth was driven by manufacturing and energy production, despite challenges in mining and quarrying.

Services represent 59.4% of GDP and employ 33.6% of the active population. The sector encompasses jewellery, boosted by the quality of its diamonds, and tourism. The ICT sector is also burgeoning and is prioritized by the government. The banking sector, particularly robust and stable, consists of 17 commercial banks (European Banking Federation). According to the Minister of Economy, Armenia welcomed 2.2 million tourists in 2024, marking a 7% decrease from the previous year mostly due to a decrease in visitors from Russia. The government has set a target of 2.6 million tourists to be reached by 2026. The retail sector is also important: the domestic trade turnover for 2024 totalled ARD 6,378,265.3 million at current prices, reflecting a 17% increase compared to 2023, according to the National Statistical Committee of Armenia.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 52.3 14.1 33.6
Value Added (in % of GDP) 8.5 23.4 59.4
Value Added (Annual % Change) 2.9 2.7 12.2

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Armenian Dram (AMD) - Average Annual Exchange Rate For 1 MUR 13.5214.0014.2313.5312.43

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
71,9/100
World Rank:
32
Regional Rank:
18

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

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Foreign Trade in Figures

Foreign trade in Armenia represents 120% of GDP (World Bank, latest data available), and the country follows an open and liberal policy regarding international commerce. Armenian exports of precious stones, metals, and related articles surged 2.3 times to USD 3.2 billion in 2023, becoming the largest export group. Machinery and equipment followed, growing 79.6% to USD 1.29 billion. Mineral products and ready-to-eat foods ranked third and fourth, with exports of USD 887.7 million and USD 885.1 million, respectively, reflecting declines of 13.6% and a slight increase of 0.3%. Vehicles for land, air, and water transport rounded out the top five, growing 64.9% year-on-year to USD 548.3 million (National Statistical Committee of Armenia, 2023). On the other hand, imports of machinery and equipment were the largest product group, rising 42.3% in 2023 to USD 2.46 billion. Precious and semi-precious stones, metals, and related articles followed, with a 233.0% increase to USD 2.30 billion, making it the second largest group. Vehicles for land, air, and water transport ranked third, reaching USD 1.83 billion after a 91.3% rise. Mineral product imports decreased by 6.9% to USD 1.11 billion, making it the fourth largest group. Textiles, the fifth largest, increased 63% to USD 650 million.

According to data from OEC, Armenia’s main export partners in 2023 were Russia (37.5% of the total), the United Arab Emirates (24.9%), Hong Kong (7.4%), China (4.7%), and Georgia (3.8%); whereas imports came chiefly from Russia (29.0%), China (12.1%), Vietnam (6.1%), Georgia (5.3%), and Iran (4.5%). The country has been searching for new energy sources, especially after the Russian-Georgian conflict, which temporarily disrupted its hydrocarbon supply and revealed the country's energy vulnerabilities. Tensions remain with a couple of its neighbouring countries, such as Azerbaijan and Turkey, and have an impact on trade. Armenia's closeness with Russia and its adherence to the Eurasian Economic Union limit the country's ability to further integrate with the EU.

Armenia has a structural trade deficit, estimated at 0.8% of GDP in 2023, compared to 1% one year earlier (World Bank). According to figures from the WTO, in 2023, Armenia exported goods with a total value of USD 8.4 billion (+57% year-on-year), while it imported goods worth USD 12.3 billion (an increase of 40.3%). Concerning services, the country exported USD 6.3 billion and imported USD 3.7 billion (+47.7% and +41.6% year-on-year, respectively). According to preliminary figures from the National Statistics Committee (NSC), Armenia's foreign trade in 2024 surged by 41.5% from 2023, reaching over USD 30.1 billion. Exports increased by 53.1%, amounting to over USD 13 billion, while imports reached over USD 17 billion, recording a 33.8% increase compared to 2023.

 
Foreign Trade Indicators 20192020202120222023
Imports of Goods (million USD) 5,5144,5595,3578,76912,308
Exports of Goods (million USD) 2,6402,5443,0235,3608,415
Imports of Services (million USD) 2,5219811,3382,6093,695
Exports of Services (million USD) 2,4341,0991,7354,3206,382
Imports of Goods and Services (Annual % Change) 11.6-31.512.935.030.2
Exports of Goods and Services (Annual % Change) 16.0-33.518.659.930.7
Imports of Goods and Services (in % of GDP) 54.839.743.851.260.3
Exports of Goods and Services (in % of GDP) 41.429.835.950.259.5
Trade Balance (million USD) -1,722-1,382-1,505-1,866-2,515
Trade Balance (Including Service) (million USD) -1,817-1,258-1,115-147-194
Foreign Trade (in % of GDP) 96.169.579.7101.4119.7

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2023
Russia 40.4%
United Arab Emirates 26.6%
Hong Kong SAR, China 8.0%
China 5.1%
Netherlands 2.8%
See More Countries 17.2%
Main Suppliers
(% of Imports)
2023
Russia 32.3%
China 13.5%
Vietnam 6.8%
Iran 5.0%
United States 4.6%
See More Countries 37.9%

Source: Comtrade, Latest Available Data

 
 

Main Products

8.4 bn USD of products exported in 2023
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 21.6%
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 7.0%
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 6.4%
Articles of jewellery and parts thereof, of...Articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal (excl. articles > 100 years old) 5.9%
Copper ores and concentratesCopper ores and concentrates 5.8%
See More Products 53.3%
12.0 bn USD of products imported in 2023
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 11.4%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 8.9%
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 6.0%
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 4.7%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 4.3%
See More Products 64.8%

Source: Comtrade, Latest Available Data

 
 

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Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Ministry of Agriculture
Ministry of Energy and Natural Resources
Ministry of Economy
Statistical Office
National Statistical Service
Central Bank
Central Bank of the Republic of Armenia
Stock Exchange
Armenian Securities Exchange
Search Engines
SPYUR Business Directory
Economic Portals
Armenian News Agency

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Political Outline

Current Political Leaders
President: Vahagn KHACHATURYAN (since 13 March 2022)
Prime Minister: Nikol PASHINYAN (since 10 September 2021)
Next Election Dates
Presidential: 2029
National Assembly: 30 June 2026
Main Political Parties
There are numerous political parties in Armenia. The main parties/alliances are:

- Civil Contract party: centrist, liberalist, reformist
- Armenia Alliance: nationalist, pro-Russia
- I Have Honor Alliance: nationalist, pro-Russia, it consists of the Republican Party of Armenia (right-wing, national conservative party) and the Homeland Party (which withdrew from the alliance in June 2022).

Other parties include:

- Prosperous Armenia (BHK): centre-right
- Hanrapetutyun Party: conservative, pro-European
- Armenian National Congress: social liberalism, pro-European.

Type of State
Armenia is a republic based on parliamentary democracy.
Executive Power
The President of Armenia is the head of state with primarily ceremonial duties and is indirectly elected for a 7-year term by the National Assembly. The Prime Minister is the head of government and holds most of the executive power, being elected by a majority vote in the National Assembly.
Legislative Power
The legislative branch in Armenia is composed of a unicameral National Assembly (Parliament). Members are elected through a proportional representation system for a five-year term. The minimum number of seats is 101; there are currently 107 members.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
63/180
Evolution:
61/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
4/7
Civil Liberties:
32/60

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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Latest Update: May 2025