April 2022. Republic of Armenia: Social and economic development in 2021 and medium-term prospective

In 2021, due to an improvement in both internal and external demand, the economy of the Republic of Armenia demonstrated high recovery growth of 5.7%. As a result of continued price growth in world food markets, as well as a rapid recovery in the domestic demand, inflation accelerated to 7.1%, exceeding the target of the Central Bank. Against the background of mounting inflation risks, the monetary conditions tightened. The fiscal position improved due to the fiscal policy getting less expansionary, which was consistent with the Government's plans for smooth consolidation. Improved terms of trade, stronger external demand, and a recovery in remittances contributed to a lower current account deficit, down to 1.3% of GDP, which was financed with net inflows under the financial account.

This macroeconomic review does not include any medium-term forecasts of the key macroeconomic indicators, as they are under revision, taking into account the potential impact of sanctions, imposed on the Russian Federation, on the economy of the Republic of Armenia.

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