Economic Monitor

Economic Monitor Armenia – Issue 05 | June 2021


  • Prime Minister Pashinyan has stepped down, elections are scheduled for 20 June 2021
  • GDP to grow by 2.9% in 2021; mainly on the back of public expenditure
  • Relatively subdued growth outlook after twin shocks in 2020
  • Consumption to pick up again in 2021, investment likely to remain subdued
  • Budget deficit estimate: 5.4% of GDP in 2021; public debt to rise to 69% of GDP in 2021; fiscal consolidation in 2022 likely
  • Current account deficit estimated at 6.7% of GDP in 2021
  • Mixed performance of exports expected: rebound due to high metal prices, but slow return of tourists in 2021; imports to pick up again
  • Slow recovery of FDI due to political uncertainty after decline by more than half in 2020
  • Issuance of EUR 750 m Eurobond secures external sustainability for the time being
  • Depreciation of Dram amid high uncertainty throughout Q4-2020 and Q1-2021
  • Hikes in policy rate due to increased inflation, after multiple reductions in 2020

Economic Monitor Armenia – Issue 04 | Update March 2021


  • GDP to decline by 7.6% in 2020; twin shocks: COVID-19 and military confrontation
  • Slow recovery expected; GDP to stagnate in 2021, uncertainty stems from political instability
  • Investment likely to remain subdued in 2021, consumption may recover
  • Budget deficit estimate: 5.4% of GDP in 2020; public debt to rise to 69% of GDP in 2021
  • Current account deficit estimated at 6.0% in 2020; lower than 2019
  • Strong decline in exports (esp. tourism) counteracted by even larger import contraction
  • At the same time: FDI declined by almost half in 2020, expected to recover only slowly
  • Augmentation of IMF stand-by arrangement and disbursement of approx. USD 232 m key for financing the budget deficit in 2020
  • Rather stable exchange rate in 1H-2020, depreciation of Dram amid high uncertainty in Q3
  • After multiple reductions in 2020, hikes in policy rate in Dec-20/Jan-21 due to increased inflation

Economic Monitor Armenia – Issue 03 | August 2020 (update)

Overview: economic situation in 2020

  • GDP to drop by 1.5%; pre-COVID forecast: 5.5%
  • Strong reduction of private consumption and investment counteracted by gov spending
  • Budget deficit will amount to 5.0% of GDP, compared with pre-COVID plan of 2.3%
  • Current account deficit at 8.6% of GDP, only slightly higher than pre-COVID 8.4%
  • Strong decline in exports and remittances counterbalanced by large import contraction
  • But: lower FDI and reversal of private capital inflows create problems for financing the current account deficit
  • Augmentation of IMF stand by arrangement and immediate disbursement of USD 280 m key for financing both the budget and the current account deficit
  • Rather stable exchange rate, after temporary depreciation by 5% in March 2020

Economic Monitor Armenia – Issue 02 | January 2020


  • Economic growth at ca. 7.0% in 2019, significantly higher than expected
  • Main driver was private consumption, on the back of robust retail lending
  • Investment activity declined in 2019, with negative implications on mid term growth
  • GDP is forecast to grow by 4.9% in 2020

Economic Monitor Armenia – Issue 01 | October 2019


  • Economic growth in Q1 19 (7.2%) and Q2 19 (6.5%) significantly higher than expected
  • Budget surplus in 7M2019 due to high revenues & under execution of capital expenditures
  • Inflation forecast for 2019 at 2.1%; low inflation key ingredient of macroeconomic stability