Armenia overview

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Urban scene in Armenia

In Armenia we focus on:

Developing the financial sector and improving access to finance. The EBRD will focus on providing its traditional SME and micro-finance lines targeting areas outside Yerevan, the capital, and facilitating access to credit for SMEs in the rural areas. In rural areas, we will launch agricultural credit lines in local currency and associated Technical Cooperation (TC), in particular as the sector becomes more commercialised. The EBRD, in cooperation with the IMF and World Bank, will engage in policy dialogue and provide TC to strengthen the Central Bank’s capacity to reduce inflation and dollarisation and develop local money and capital markets.

Improving municipal and urban transport infrastructure. The EBRD will support enhanced private sector participation in the water and waste water sectors to support the introduction of cost-reflective tariff structures, improve service availability and reduce losses. We will support through our investments urban and municipal transport reforms including the introduction of integrated transport management and ticketing systems, better parking management and regulation of feeder bus and minibus services. Intensive policy dialogue will be required to support reforms at the central and local levels.To address affordability and debt capacity constraints, a high level of grant co-financing will be required along with gradual tariff increases toward cost recovery.

Developing agribusiness and high value-added, export-oriented industrial companies. The EBRD will help to address challenges in the industrial sectors through support for improvements to the business environment, strengthening corporate governance and increasing access to finance for local micro, small and medium sized enterprises (MSMEs). We will identify investments in industries with export potential, including in areas highlighted by the authorities’ recent programme of export promotion. The EBRD will aim to support the agricultural sector by targeting investments along the whole value chain. Where possible, we will aim to utilise local currency financing. The EBRD will also enhance activities to support MSMEs in key sectors through provision of advisory services.

Improving the regulatory and institutional framework for sustainable energy and increasing value-added in the mining sector. The EBRD will support investments in financially viable renewable energy projects and, through partner banks, continue to finance energy efficiency credit lines for industrial and residential users. We will support power generation, particularly new entrants and non-state participants, and will consider participating in regional electricity infrastructure projects that strengthen competition in the regional electricity market. The EBRD will support bankable mining operations with reputable investors who demonstrate high standards of environmental and social protection.

Invitation to comment

The EBRD has started work on the revision of its strategy for Armenia and invites comments from the public based on the draft strategy.

English | Armenian

Any comments should be submitted to no later than 30 October 2015 so that they can be taken into account.

The EBRD’s latest Armenia strategy was adopted on 29 May 2012

EBRD forecast for Armenia’s Real GDP Growth in 2015 -1.5%

EBRD forecast for Armenia's Real GDP Growth in 2016 1.0%

Armenia’s economy slowed down significantly in early 2015, driven by plummeting remittances and shrinking exports. Real GDP growth is likely to be negative in 2015. After rapid but mild devaluation in late-2014, Armenian dram stabilized, helped by tight monetary policy and central bank interventions. Contagion from the currency to the banking sector has been contained, but the credit activity grounded to a halt. Despite a successful Eurobond placement in March, end-March foreign currency reserves were 25 per cent lower than a year ago, at around 3.5 months of imports. Fiscal space is limited by an increased public debt-to-GDP ratio. Prospects of quick economic recovery in 2016 will depend on the external environment, mainly in Russia. We forecast GDP growth at -1.5 per cent in 2015 and +1 per cent in 2016.

Armenia in the EBRD’s 2014 Transition Report


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