October 2022. Republic of Armenia: Social and Economic Development in the first half of 2022

In H1 2022, the economic growth in the Republic of Armenia accelerated significantly to 11%, driven by both external and domestic demand. The imposition of sanctions against Russia had a substantial positive effect on the economy of the Republic of Armenia through an influx of tourists, expansion of exports of goods, as well as two-fold growth of remittances. Inflation accelerated significantly to 10.3%, driven by high prices on international commodity markets and stronger domestic demand. Under those conditions, the Central Bank of Armenia tightened the monetary conditions further by raising the refinancing rate twice. The fiscal position improved significantly against the background of high economic growth and actual financing of budget expenditures below approved amounts. The outpaced growth of imports compared to exports resulted in a higher current account deficit, despite a substantial inflow of remittances. In H1 2022, current account deficit amounted to 2.5% of GDP and was financed by net inflows under the financial account.

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