External factors drive Armenia`s economic growth - Luys Foundation

ArmInfo. The dynamics of Armenia's  economic activity are still being determined by external factors, according to a study by the Luys Foundation, whose experts  have analyzed the country's socioeconomic development during the  period of January-December 2025.

As noted in the study, according to data for 2025, sufficiently high  growth rates of economic activity were recorded. The rates amounted  to 9.1%, which is approximately 1.1 percentage points higher than the  2024 figure. The acceleration primarily occurred at the end of the  year due to the recovery of industry, which, in turn, was driven by  the increased gold re-exports. In other words, the dynamics of  Armenia's economic activity are still determined by external factors.

Industrial growth rates accelerated at the end of the year, reaching  38.6% in December, 2025, driven by several unstable factors. A  significant portion of this growth-about 19.9 percentage  points-according to November data, was due to an approximately  2.9-fold increase in the " non-ferrous metals production " subsector.  The latter mainly reflects the growth of gold re-exports, which is  naturally not a stable phenomenon and can be neutralized by factors  beyond the control of the Armenian economy. Therefore, this type of  economic growth is unsustainable and does not contribute to  increasing long-term potential.

In addition, as the foundation's experts note, the RA state budget  continues to deviate significantly from the plan. Although state  budget revenues were exceeded and tax revenues were collected almost  in accordance with the plan, the state budget deficit deviated from  the plan by approximately 30.6% due to a significant lag in  expenditures. Budget capital expenditure indicators improved compared  to previous years, mainly due to the large share of expenditures by  the Ministry of Defense. 

Recall, RA Economy Minister  Gevorg Papoyan previously noted that  economic activity in Armenia grew by 9.1% in 2025. He emphasized that  growth was recorded across all economic sectors, with some even  recording double-digit figures. Specifically, the construction sector  grew by 20%, while the services sector grew by more than 10%.  Agriculture, industry, and trade also saw significant increases.  "That is, there are no areas of the economy where we haven't seen  significant growth. And this growth isn't just a statistical  indicator, but a change in quality of life," Papoyan noted. In this  context, the Minister reported that over 45,000 new jobs were created  in Armenia in 2025, and the average salary exceeded 400,000 drams.