Armenia’s economy is expected to grow by 5% in 2025, slowing from previous years, according to the April edition of the Asian Development Bank’s (ADB) “Asian Development Outlook” report.
The report, cited by Hetq, also predicts the slowdown will persist into 2026, with GDP growth estimated at 4.7%.
In comparison, Armenia’s economy expanded by 12.6% in 2022, 8.3% in 2023, and is projected to grow 5.9% in 2024. The slowdown is evident across various sectors, most notably in services.
The ADB attributes this trend mainly to the waning impact of external factors. During 2022–2023, Armenia benefited from economic shifts in Russia, particularly due to sanctions following the Russia-Ukraine war. However, the influence of these factors has significantly diminished.
Domestic demand is expected to be the main driver of growth in the coming years. While services will remain the leading sector, the ADB notes that the contributions of industry and agriculture are likely to be modest.
According to Armenia’s Statistical Committee, inflation averaged just 0.3% in 2024. The ADB links this low rate to falling global commodity prices and monetary policy implemented by the Central Bank of Armenia (CBA).
Since mid-2023, the CBA has lowered its refinancing rate, after previously raising it to curb inflation. This tool was used to cool consumer demand by making credit more expensive. Once inflation eased, the central bank shifted its strategy to support economic activity by cutting interest rates.
The CBA has indicated that loan demand may soften and interest rates could decline further.
For 2025, the ADB forecasts that inflation in Armenia will rise to 3%, aligning with the CBA’s target range of 3% ±1 percentage point. The central bank considers this range optimal for stable economic development.
Following the outbreak of the Russia-Ukraine war in February 2022, Western sanctions imposed on Russia included trade restrictions, banking bans, and limits on investment. Armenia has since served as a key transit route for Russia to bypass these restrictions.
