IMF: Armenia's economy to grow by up to 5.5% by 2028
YEREVAN, November 26. /ARKA/. Armenia's economy has the potential for annual growth of up to 5.5% over the next five years, provided that structural reforms and opportunities for labor force integration are realized, said Umang Rawat, IMF Resident Representative in Armenia, while presenting the report Caucasus and Central Asia: Economic Outlook and Policy Challenges.
He noted that in 2022-2023, the trade sector, the influx of labor, and developments in the financial sector contributed to the expansion of Armenia's economy and its high growth.
"However, the drivers of growth have changed. In 2022, the main driver was net exports, but the growth structure has shifted towards consumption and investment. In 2024, we observe a gradual shift towards more stable growth," he said.
In this regard, Rawat noted that these trends are not negative phenomena.
"Over the past two years, the IMF and other international financial institutions expected that economic growth would stabilize at a more sustainable level. And now, in fact, we are seeing exactly that. It was predicted that this would happen, so it was not a surprise," he emphasized, adding that when economic growth exceeds its potential for an extended period, it carries certain risks.
According to the IMF Resident Representative, Armenia's economic growth is returning to normal levels, along with the fading of temporary factors, including the influx of labor from Russia and India, as well as the integration of refugees from Nagorno-Karabakh into the labor market.
"It will impact potential growth, possibly for the next four to five years," he said, adding that in the long term, attention should be given to demographic policy.
Figures and forecasts for the Armenian economy
The state budget for 2024 forecasts economic growth in Armenia at 7%. The Central Bank of Armenia expects the country's economic growth in 2024 to range from 6.5% to 5.8%. The draft state budget for 2025 projects economic growth at 5.6%.
The EDB predicts Armenia's GDP will grow by 7.5% in 2024 and 4.2% in 2025. The World Bank expects the Armenian economy to grow by 5.5% in 2024 and 5% in 2025. The IMF projects a 6% growth rate for 2024 and 4.9% for 2025. The EBRD forecasts economic growth at 6.2% in 2024 and 4.8% in 2025. The ADB expects growth of 5.7% in 2024 and 6% in 2025. According to Fitch Ratings, Armenia's economy will grow by 6% in 2024 and 4.9% in 2025. S&P predicts 6.2% growth for 2024, while the UN anticipates 5.2% growth in 2024 and 4.8% in 2025.
