Structural problems persist, but Armenia's economy continues to grow — analyst
16.04.2026,
13:39
The current dynamics of the Armenian economy remain positive despite persistent structural problems, financial analyst Narek Avakyan wrote in a Facebook post.
YEREVAN, April 16. /ARKA/. The current dynamics of the Armenian economy remain positive despite persistent structural problems, financial analyst Narek Avakyan wrote in a Facebook post.
According to him, key constraints include dependence on one or two major trading partners, primarily Russia and the UAE, unbalanced foreign trade, low investment activity, regional imbalances, and a weak financial sector.
Avakyan notes that of Armenia's total export volume of $8.4 billion last year, approximately 25% was re-exported, while approximately a third was low-value-added goods, including mineral raw materials, unprocessed fruits, and vegetables.
According to his estimates, the share of investment in the Armenian economy remains below 25% of GDP, while the norm for a developing country is 40-45%. One of the reasons, he cites, is the unavailability of corporate loans, with interest rates reaching 20-25%.
Among other problems, the analyst highlights disparities in regional development. According to him, Yerevan's share of the country's economy exceeds 40%, and wages in the capital are, on average, 2-2.5 times higher than in most marzes.
He also points to the underdeveloped financial sector. He estimates that the banking system is not fully fulfilling its function of providing credit to the economy, and the stock market remains effectively limited: the number of issuers on the Armenian Stock Exchange's stock market barely reaches 10.
At the same time, Avakyan assesses Armenia's current macroeconomic indicators positively. According to his data, the country's GDP grew by 7.2% in 2025, inflation was 3.3%, and the economy's size approached $30 billion. In 2026, he believes this figure could exceed $32 billion.
He also notes the improvement of a number of social and fundamental indicators, including the growth of nominal wages to approximately 300,000 drams in January-February, a decrease in unemployment below 12% last year, the stability of the national currency, and the growth of the Central Bank's international reserves (exceeding $5.5 billion in March).
According to Avakyan's forecast, Armenia's GDP growth in 2026 will be 5.5-6%, but could exceed 6% amid strong consumer activity and growing foreign investment. He expects foreign direct investment to reach $1 billion, and total investment to reach $8 billion, or nearly 25% of GDP.
He believes the services sector will remain the main driver of growth, while energy and agriculture may show weaker growth.
Avakyan believes that without addressing Armenia's structural problems, it will be difficult to achieve sustainable improvements in economic relations and significant results in major projects and businesses. However, he estimates that the economy is performing well in the short term, and inflation by the end of the year could rise to approximately 4%.
According to him, key constraints include dependence on one or two major trading partners, primarily Russia and the UAE, unbalanced foreign trade, low investment activity, regional imbalances, and a weak financial sector.
Avakyan notes that of Armenia's total export volume of $8.4 billion last year, approximately 25% was re-exported, while approximately a third was low-value-added goods, including mineral raw materials, unprocessed fruits, and vegetables.
According to his estimates, the share of investment in the Armenian economy remains below 25% of GDP, while the norm for a developing country is 40-45%. One of the reasons, he cites, is the unavailability of corporate loans, with interest rates reaching 20-25%.
Among other problems, the analyst highlights disparities in regional development. According to him, Yerevan's share of the country's economy exceeds 40%, and wages in the capital are, on average, 2-2.5 times higher than in most marzes.
He also points to the underdeveloped financial sector. He estimates that the banking system is not fully fulfilling its function of providing credit to the economy, and the stock market remains effectively limited: the number of issuers on the Armenian Stock Exchange's stock market barely reaches 10.
At the same time, Avakyan assesses Armenia's current macroeconomic indicators positively. According to his data, the country's GDP grew by 7.2% in 2025, inflation was 3.3%, and the economy's size approached $30 billion. In 2026, he believes this figure could exceed $32 billion.
He also notes the improvement of a number of social and fundamental indicators, including the growth of nominal wages to approximately 300,000 drams in January-February, a decrease in unemployment below 12% last year, the stability of the national currency, and the growth of the Central Bank's international reserves (exceeding $5.5 billion in March).
According to Avakyan's forecast, Armenia's GDP growth in 2026 will be 5.5-6%, but could exceed 6% amid strong consumer activity and growing foreign investment. He expects foreign direct investment to reach $1 billion, and total investment to reach $8 billion, or nearly 25% of GDP.
He believes the services sector will remain the main driver of growth, while energy and agriculture may show weaker growth.
Avakyan believes that without addressing Armenia's structural problems, it will be difficult to achieve sustainable improvements in economic relations and significant results in major projects and businesses. However, he estimates that the economy is performing well in the short term, and inflation by the end of the year could rise to approximately 4%.
