The Armenian economy expanded by over 12 percent in 2022 and 8.7 percent in 2023 as local entrepreneurs took advantage of the sanctions by re-exporting many Western-manufactured goods to Russia. Early this year, Armenia appeared to have also become a conduit for exports of Russian diamonds and gold to world markets.
“The impact of these transitory factors is going down,” said Umang Rawat, the IMF’s resident representative in Armenia.
“Growth is going to move towards more sustainable, normal levels,” he told an audience in Yerevan. “This is something that was expected. It’s not something that has come as a surprise.”
Rawat said the fund expects GDP growth to slow down to 6 percent this year and 4.9 percent in 2025. Trade, services and construction remain its “key drivers,” added the IMF official.
Finance Minister Vahe Hovannisian made similar growth projections when he presented the Armenian government’s draft state budget for next year to lawmakers on November 12. He too said that the country’s macroeconomic performance is “returning to certain normal levels.”
“Under these conditions, we should spend taxes paid by our public with greater care and prudence,” Hovannisian said, adding that the government should at the same time keep up its crackdown on tax evasion.
Rawat likewise stressed the importance of improving fiscal discipline and tax collection. He said greater government spending on healthcare and education as well as “stronger reform implementation” are also essential for long-term economic growth.
The IMF anticipates an annual growth rate of 4.5 percent in 2026-2029. Rawat listed a potential “escalation or expansion” of the conflict with Azerbaijan among downside risks to this outlook. He also noted Armenia’s “resilience to various shocks.”