EBRD predicts Armenia’s economy to grow by 6.2% in 2024

YEREVAN, 15 May. /ARKA/ The European Bank for Reconstruction and Development expects Armenia’s economy to grow by 6.2% in 2024 and by 4,8% in 2025, as per its recent Regional Economic Prospects report, published on Wednesday.

The EBRD forecasted a 4.5% economic growth in 2024 for Armenia in its previous report, published in September 2023. Earlier in May, the EBRD President Odile Renaud-Basso announced Armenia’s economy would grow by roughly 5% both in 2024 and 2025.

The latest report stressed that Armenia’s economy showed continued solid performance. 

“[Armenia’s] GDP increased by 8.7 per cent on the back of buoyant export demand and double-digit growth of construction, hospitality, and information and communication services. Net capital inflows in 2023 declined by almost 40 per cent compared with 2022 but remained substantially higher than in 2021. As the surplus in exports of services offset the deepening deficit in the trade of goods, the current account returned to a deficit of 2.1 per cent of GDP,” the report says.

The EBRD also believes that Armenian public finances improved in 2023 due to prolonged, robust economic growth and improved management. This allowed Armenia to provide a budget response to support refugees in Q4 2023.

“Inflation mostly stayed close to zero during the year and enabled a cautious reduction in the policy rate by the central bank,” the report notes.

The EBRD expects that elevated public expenditures aimed at easing the integration of refugees will support growth even further, however, there are “risks to economic outlook” that “mostly arise from geopolitical uncertainty”. 

Armenia’s state budget expects the country’s economy to grow by 7% in 2024, while the Central Bank expects the figure to stand between 5.3% and 6.4%.

The World Bank expects the Armenian economy to grow by 5.5% in 2024, and by 4.9% in 2025. The IMF predicts 5% growth for the Armenian economy in 2024.