The International Monetary Fund (IMF) anticipates a gradual slowdown in Armenia's economic growth in the coming years, despite the continuation of current positive trends. This was stated by IMF Deputy Managing Director Bo Li following a discussion of Armenia's economic situation at the Fund's Executive Board meeting.
According to IMF projections, driven by strong domestic demand, Armenia's real GDP growth is expected to reach 6% in 2024. However, growth is projected to moderate to 5% in 2025 and further slow to 4.5% in the medium term. The IMF notes that accelerating structural reforms could enhance the country's economic growth potential.
Despite the deceleration, the IMF highlights that favorable macroeconomic conditions in Armenia persist. Inflation remains below the Central Bank of Armenia's target and is expected to gradually align with the target level in the medium term. External and financial buffers remain robust.
The report places particular emphasis on fiscal policy. Armenia's government has adopted a 2025 budget with an overall deficit of 5.5% of GDP, which aligns with the IMF-supported program and addresses urgent spending needs. The authorities plan to resume fiscal consolidation in 2026. IMF experts underscore the importance of gradual fiscal consolidation in the medium term to maintain fiscal sustainability.
To sustain inclusive and sustainable growth, the IMF recommends that Armenia continue implementing structural reforms, focusing on increasing labor market participation, particularly among youth, women, and vulnerable groups. Additionally, the Fund emphasizes the critical importance of reforms aimed at export diversification, improving the business environment, strengthening governance, and advancing climate policy initiatives.
Earlier, BMG reported that economic growth forecasts for Armenia vary depending on the source. While the Armenian government has set an ambitious growth target of 7% in the 2024 state budget, international financial institutions provide more conservative estimates.
The Eurasian Development Bank (EDB) projects that Armenia's GDP will grow by 6% in 2024, with a slight slowdown to 5.5% in 2025. The World Bank (WB) offers an even more cautious outlook, forecasting economic growth of 5.5% in 2024 and 5% in 2025.
As for the official expectations of the Armenian government for 2025, they closely align with the forecasts of international organizations, with the state budget projecting economic growth at 5.1%.
