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 2022 1.5%

EBRD forecast for Armenia's Real GDP Growth in 2023 4.0%

GDP growth in 2021 is estimated at 5.7 per cent and was based on growth of almost all sectors of the economy except agriculture and some service activities. The current account and fiscal deficits narrowed slightly to 3.7 per cent and 4.6 per cent of GDP respectively. Inflation reached a peak of 9.6 per cent year-on-year in November 2021 as a result of high international food prices and pass-through from previous dram depreciation before moderating to 6.5 per cent year-on-year in February 2022. However, inflation picked up again to 7.4 per cent in March on the back of a new wave of rising international energy and grain prices, which threaten to keep inflation elevated for longer. The Central Bank of Armenia continues to tighten monetary policy and raised the refinancing rate several times in recent months reaching 9.25 per cent in March 2022. The ongoing war on Ukraine threatens to stop the growth momentum of the Armenian economy. Trade and remittances are expected to suffer from an expected severe recession in Russia, which accounted pre-war for 28 per cent of Armenian exports, 33 per cent of imports and 40 per cent of money transfers to Armenia. The dram initially came under pressure after the Russian invasion of Ukraine, but has since managed to recover its losses. International reserves remain at comfortable levels of US$ 2.9 billion in March 2022, covering approximately six months of imports. The close linkages to the Russian economy dampen the outlook for growth in 2022, with GDP expected to grow by 1.5 per cent this year and 4.0 per cent in 2023.

Armenia in the EBRD’s 2021-22 Transition Report

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