Page 17 - Caucasus Outlook 2024

2.2 Macroeconomy - Armenia
Armenia’s economy continued growing despite the increased tensions with Azerbaijan and the global conflicts between Russia and Ukraine and Israel and Hamas. The Armenian economy was projected to grow by 7% in 2023 and followed by a moderation to 5% in 2024.
The robust private consumption and investment have been the main drivers of this growth.
Inflation is expected to return to the central bank's target of 4% by the middle of 2024, stabilising around that level. Foreign direct investment and capital inflows have decreased. Fiscal overperformance has continued, with the overall fiscal balance remaining in surplus until September 2023. This is due to higher than expected revenue collection and under-execution of spending, despite the authorities' prompt fiscal support to address the urgent needs of Nagorno-Karabakh's refugees.
The Armenian currency, the dram, has experienced a dramatic rise against the USD and EUR since 2022, which continued throughout the year. Later in 2023, the currency devalued, still being far from the pre-Ukraine war normal.
The influx of Russians since 2022 had an impact on the Armenian economy, with the money transfer to and from the country increasing, but a side effect of the influx was skyrocketing rent and real estate prices, posing problems for the local population. Housing problems also increased after the displacement of Nagorno-Karabakh’s Armenian population.
Armenia’s main trade partners remained Russia and the members of the Eurasian Economic Union. The country's trade with Russia grew by 41% to over $5.4 billion, whereas the trade with Belarus grew by 14% to roughly $169 million and with Kazakhstan by 2.3 times to about $79.5 million. Armenia's trade with EU nations grew by 27.1% to approximately $2.3 billion. The top five trade partners in the European Union comprised Germany, Italy, the Netherlands, Poland, Belgium and France.
Main source: Armstat, Armenia Statistical Yearbook 2021 Others hyperlinked in category
Armenia key economic figures and forecasts
2016 2017 2018 2019 2020 2021 2022
Nominal GDP (EUR bn) 9.065 9.954 10.764 11.705 11.058 16,149 19,636
17 Central Asia & Caucasus Outlook 2021 www.intellinews.com