EFSD review: Armenia's economy slows down significantly, 2025-2027 forecast is 5%
YEREVAN, February 13. /ARKA/. The Eurasian Fund for Stabilization and Development (EFSD) has noted a significant slowdown in the growth of the Armenian economy due to a reduction in the contribution of "conjunctural factors," such as re-export volumes and the influx of tourists from Russia.
"Although the country's economy has emerged from deflation, price growth remains low: by the end of 2024, the inflation rate was 1.5%, which is significantly lower than the Central Bank's target range (4.0±1.5%). The deterioration in the balance of services led to an increase in the current account deficit. The dram exchange rate remains overvalued," the EFSD's regional economic review for "Winter 2024–2025" states.
According to the EFSD's baseline scenario, in 2025–2027, economic growth rates will stabilize around potential—approximately 5%. "It is expected that monetary policy will aim to bring inflation back to the target, and the budget deficit will widen due to a significant increase in spending, which will require attracting new sources of financing," note the fund's analysts.
The review highlights that key risks are related to external shocks (such as a faster decline in precious metals trade and a reduction in the tourist flow), which could lead to a short-term recession and create risks for budget stability and the balance of payments. "Additional fiscal risks are related to the fulfillment of social obligations for supporting displaced persons from Nagorno-Karabakh," the EFSD reports.
Economic Figures and Forecasts for Armenia
According to Armstat, Armenia's GDP grew by 8% in 2024, consumer prices rose by 0.3%, and foreign trade turnover exceeded $30.1 billion (41.5% more than in 2023).
The 2025 state budget projects economic growth at 5.1%. According to the Central Bank's report on monetary policy for the fourth quarter of this year, by the end of 2025, Armenia's GDP growth is expected to be in the range of 4.8%–7.1%, in 2026 it is forecasted at 4.7%–7%, and in 2027 at 5%–6.2%.
The EDB forecasts Armenia's GDP growth in 2025 at 5.5%, the World Bank at 5%, the IMF at 4.9%, the EBRD at 4.8%, and the ADB at 6%. According to the Fitch Ratings agency forecast, Armenia's economic growth in 2025 will be 4.9%, and S&P's forecast is around 5.5%.
About the Fund
The Eurasian Fund for Stabilization and Development (EFSD) is a regional financial mechanism with a volume of over US$9 billion, established in 2009 by the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. The EFSD's objectives are to promote economic and financial stability in its member states and support their sustainable development.
