Armenia’s economy to moderate in 2024, rebound in 2025 – ADB

Armenia’s economic growth rate is forecast to slow in 2024 due to a decline in external demand before recovering slightly in 2025, according to the Asian Development Bank (ADB).

Released today in its Asian Development Outlook (ADO) April 2024, ADB projects Armenia’s gross domestic product (GDP) growth to moderate to 5.7% in 2024 from 8.7% last year. That figure is forecast to rise again in 2025 to 6% on the successful implementation of the government’s expanded investment programs for infrastructure and housing.

“Following strong economic growth in 2022, slower monetary inflows from the Russian Federation last year cut growth in private consumption,” said ADB Deputy Country Director for Armenia Luke Fochtman. “This brings added impetus to the government’s housing and infrastructure programs which should propel growth next year as those investments take hold.”

Despite slower growth overall, expansion in construction and consumer services will remain robust. Services are projected to grow by 9.3% in 2024 and 9.4% in 2025, supported by higher tourism inflows and reflecting strong but moderating gains in finance, recreation, retail trade, transport, and information and communication.

Industry, including construction, is projected to expand by 6.2% in 2024 and 7.4% in 2025. Growth in mining and quarrying will depend on developments in global commodity prices and the opening of new mining sites. Growth in construction is projected to rise to 16.3% in 2024 and 18.1% in 2025, in line with the government’s plans to further increase capital outlays and make substantial public investments in roads and social infrastructure.

Inflation is anticipated to rise to 3% in 2024 from 2% last year, before accelerating further to 3.5% in 2025. 

“One area where policy interventions can improve the quality of life for Armenians is in health care,” added Mr. Fochtman. “With comprehensive health reforms and a universal health insurance system, the government will be able to stabilize health care financing, lower out-of-pocket costs, promote access to high-quality care, and improve financial protection for the population. We believe that implementing these reforms will enhance accessibility, affordability, and the quality of health care services.” 

Since Armenia joined ADB in 2005, the bank has become one of the country’s largest multilateral development partners. Through almost 2 decades of partnership, ADB has supported the government’s priorities in transport, public sector management, finance, energy, water, and other urban infrastructure.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

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