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Armenia overview

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.

As well as being a country where the EBRD works, Armenia is also an EBRD donor. In 2015 Armenia signed a €1 million contribution agreement to the Eastern Europe Energy Efficiency and Environment Partnership (E5P) Fund.

The EBRD’s latest Armenia strategy was adopted on 27 November 2019


EBRD forecast for Armenia’s Real GDP Growth in 2023 5.0%

EBRD forecast for Armenia's Real GDP Growth in 2024 5.0%

Economic growth reached 14.2 per cent in 2022. The manufacturing sector recorded growth of 7.8 per cent and services increased by 28.2 per cent, with construction and trade growth in double digits. The services sector benefitted from the exceptional increase in non-resident demand, especially for information, communication and tourism-related services. At the same time, the net inflow of money transfers nearly doubled in 2022 due to an almost seven-fold increase in transfers from Russian citizens who found a refuge in Armenia, including many of Armenian origin. As a result, economic growth in the first three months of 2023 stood at 12.2 per cent year-on-year, but signs of a slowdown are emerging. Annual inflation subsided to 5.4 per cent in March 2023 reflecting monetary tightening and exchange rate appreciation during 2022. GDP growth of 5.0 per cent is expected in both 2023 and 2024, subject to major geopolitical downside risks.

Armenia in the EBRD’s 2022-23 Transition Report

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