After experiencing strong economic growth in 2022 and 2023, Armenia’s economy saw a return to more typical levels in 2024, with GDP growth slowing to 5.9%. In the first half of 2025, growth continued at a rate of 5.6%, while inflation increased.
The rapid expansion in previous years was largely due to temporary factors such as re-exports and capital inflows related to Russia’s invasion of Ukraine. These effects began to subside in 2024. Growth during the first half of 2025 was supported by private consumption, investment, and robust activity in services and construction sectors.
Inflation rose from 1.7% in January to 3.3% by October 2025, mainly driven by higher food prices. Unemployment also increased from 12.4% in 2023 to 13.9% in 2024, influenced by an influx of refugees, but later improved to 12.3% in the second quarter of 2025.
According to projections, Armenia’s economic growth is expected to slow further to around 5.2% for all of 2025 and could converge toward 4.7% by the year 2027. The outlook benefits from efforts at normalizing regional relations and progress with support from the European Union; however, ongoing geopolitical tensions and uncertainties about trade policy remain risks for future performance.
The government aims to achieve its goals set out in the Five-Year Action Plan (2021–2026) and the Export Strategy (2025–2030). Achieving these objectives will require a more competitive business environment, especially within wholesale and retail trade sectors—which have played a significant role by contributing about a quarter of GDP growth between 2017 and 2024 and employing roughly one-eighth of workers between 2018 and 2023.
Despite their importance, these sectors show high market concentration: “in food retail, the probability that the four largest firms remain dominant over the next three years is 90% (vs. 60% in peers), indicating weak market dynamism and lagging labor productivity.”
The report emphasizes that improving competition—particularly within wholesale and retail—is essential for Armenia’s inclusive growth agenda. It outlines several priority actions: “(1) expanding CCPC capacity and digital enforcement tools; (2) enforcing rules to curb unfair retailer–supplier practices and deploying digital-enabled systems to monitor wholesale markets; and (3) refining targeted aspects of the competition framework to support strategic, risk-based enforcement.” According to the report, these steps will help ensure fair pricing for consumers while supporting equity for low-income households.