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.

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 first EBRD project with co-financing with E5P for street lighting in Yerevan was signed in 2015.

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

Armenia's policy response to the coronavirus crisis

The EBRD is monitoring Armenia's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.

Learn more

EBRD forecast for Armenia’s Real GDP Growth in 2020 -5.0%

EBRD forecast for Armenia's Real GDP Growth in 2021 4.0%

Prolonged containment measures have been weighing on the Armenian economy during 2020. The state of emergency, introduced in March 2020 and extended for five consecutive months until the first half of September, was replaced by a nationwide quarantine expected to be in force until January 2021. Restrictions on international border crossings and social gatherings remain, albeit less strict compared with those introduced in March. GDP growth of 3.9 per cent year-on-year in the first quarter of the year turned to a 13.7 per cent decline year-onyear in the second quarter as household consumption contracted by nearly 20 per cent, investments by nearly 30 per cent and trade by approximately 35 per cent year-on-year in real terms.
High-frequency indicators of economic activity point to a 10 per cent decline (year-on-year) in economic output in July. Remittances contracted by nearly 40 per cent year-on-year in April-May. The decrease in remittances nearly levelled off in June-July, as a strong increase in transfers from the US partially offset falling remittances from Russia. In the absence of significant inflationary pressure, the refinancing rate was lowered four consecutive times in 2020, to 4.25 per cent in September. A contraction of goods and services imports, including outbound tourism, balanced out the decline in export revenues, helping to contain currency pressures and supporting exchange rate stability following the initial
28 depreciation at the onset of the pandemic. The Armenian economy is expected to shrink by 5.0 per cent in 2020. Growth of 4.0 per cent is expected in 2021, subject to considerable uncertainty related to the future path of the pandemic.

Armenia in the EBRD’s 2020-21 Transition Report

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