Page 15 - Caucasus Outlook 2025

(EBRD) initially forecast growth of 4.5%, but later revised this upwards to 6.2%. The International Monetary Fund (IMF) raised its forecast from 5% to 6% and the World Bank estimated growth at 5.5%. Similarly, the Asian Development Bank (ADB) revised its forecast downwards to 6%, while the Eurasian Development Bank (EDB) revised its forecast downwards to 6% from 7.5%. These different projections reflect different assessments of Armenia's economic conditions and potential growth drivers by the end of 2024.
As of November 2024, Armenia's GDP recorded a growth of 5.2% in the third quarter compared to the same period in 2023, totalling over AMD2.7 trillion in current prices. The Economic Activity Index (EAI) grew by 8.7% y/y in January-September 2024, indicating sustained economic expansion. The Central Bank of Armenia expects the country's economy to grow by 6.5-5.8% in 2024, with inflation in the range of 2.1-2%.
2.2.2 Industrial production
Armenia's industrial output grew steadily in 2024, increasing by 7.2% year on year, with total output reaching AMD5.4 trillion by November. This expansion was driven by strong performances in the mining, manufacturing and energy sectors. Mining, which accounts for 28% of industrial production, grew by 9.3%, boosted by increased global demand for copper and molybdenum. This growth was supported by higher production volumes and favourable international commodity prices.
The manufacturing sector was a major contributor to industrial growth, with output rising by 8.5%. The main drivers were food processing, which grew by 10.1% on the back of robust agricultural production, and textiles, which expanded by 12.4% on the back of rising exports to European and Middle Eastern markets. Production of electronics and machinery also grew by 6.8%, reflecting the success of government initiatives to modernise industrial processes and attract foreign direct investment in high-tech industries.
The energy sector grew by 5.7%, with renewable energy production increasing by 14%, driven by the expansion of solar and wind energy capacity. Traditional energy production remained stable, with hydroelectricity showing modest growth of 3% due to favourable hydrological conditions.
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