EDB investment portfolio


10 projects

$179.5 million

2.60% of the total

EFSD investment portfolio


4 projects

$512.2 million

9.3% of the total

Armenia became a full member of Eurasian Development Bank in April 2009. Its contribution to the Bank’s capital is US $100,000.



The Armenian economy continues to grow at a high rate. The country’s GDP increased by 9.6% YoY in 1Q 2018 (after growing by 11% YoY in the previous quarter). Both domestic and external factors continue to support growth.

Growing consumer demand amid increasing wages and double-digit growth in remittances from labor migrants significantly contributed to high economic growth in 1Q 2018. Retail trade turnover increased by 3.7% YoY in 1Q 2018.

Recovering external demand and the successful implementation of export support measures resulted in exports maintaining their major contribution to economic growth for three consecutive years. Exports in value terms increased by 34.4% YoY in 1Q. Economic activity is still restrained by increasing imports (+39% YoY in 1Q 2018) amid growing domestic demand.

The low base effect resulted in accelerated growth in the construction and agricultural sectors of 23% and 2.2% YoY, respectively. Despite growing external and domestic demand, the manufacturing sector exhibits an opposite trend where growth slowed to 8.2% in 1Q, compared with 16.2% in the same period a year earlier.

Positive economic development resulted in an improved Armenian sovereign rating outlook. In March, Moody’s confirmed its B1 long-term credit rating on Armenia’s debt in national and foreign currency, while changing its outlook from “stable” to “positive”.

Leading indicators calculated by the EEC indicate that a high level of economic activity continued in 2Q 2018. This is confirmed by such components of indicators as the amount of loans provided by banks to manufacturing companies and the amount of remittances from individuals.


Growing economic activity in 1Q 2018 continued to exert inflationary pressure. As a result, 12-mo CPI amounted to 3.7% in March, close to the 4% target set by the Central Bank of Armenia. Consumer prices were under further pressure from fuel, tobacco and alcohol excise taxes which were increased in order to harmonize tax legislation across the EAEU countries.

Exchange Rate

The nominal effective exchange rate of the Armenian dram (AMD) continued to decrease. It was down by 4.9% YoY in 1Q 2018 (–4% in the previous quarter). The decrease is attributed to a weakened AMD against the EUR and RUB, which strengthened against the USD in 1Q 2018. The AMD real effective exchange rate decreased by 5% YoY in 1Q 2018 (–5.5% in the previous quarter), which continued to provide support to the price competitiveness of Armenian exports.

Economic recovery in countries which are key trading partners of Armenia supported the high growth in remittances of labor migrants. According to the Central Bank, the amount of remittances in USD terms increased by 14.5% YoY in 1Q 2018. Remittances from Russia were up by 22.1%.

Fiscal Policy

In 1Q 2018, Armenia’s budget deficit amounted to AMD 26.3 billion, compared to AMD 19.2 billion a year earlier. Budget spendings decreased by 2.6% YoY, mainly due to decreases in transfer payments (by 25.1%) and in purchases of goods and services (by 18.6%). At the same time, the decrease in revenues amounted to 5.4% YoY.

A new Tax Code is effective in Armenia as of January 1, 2018. It incorporates all regulations regarding taxation. Among its innovations, there is a progressive tax scale for personal income, as well as increased excise taxes for tobacco and alcohol products and liquid natural gas, which harmonize Armenia’s excise rates with those of other EAEU countries. The new code is generally aimed at simplifying business regulation and harmonizing tax legislation across EAEU countries.

The government is going to carry on with its fiscal consolidation policy in 2018. The budget deficit is intended to be decreased to 2.7% of GDP, compared to 4.7% of GDP in 2017.

The government debt increased last year, which led to significant 16.8% YoY growth in the cost of its servicing in 1Q 2018.

Armenia’s government debt continued to increase in 1Q 2018 to about USD 6.9 billion. The government debt has increased by USD 112.5 million YTD, mainly due to an increase in government borrowings (which have increased by USD 70.5 million YTD).

Monetary Policy

The refinancing rate stayed unchanged at 6% in 1Q 2018. Given the accelerating inflation, an unchanged refinancing rate effectively implies a still expansionary monetary policy and that the Central Bank plans to stabilize inflation near the target level. According to the Central Bank, moreover, it may reduce the stimulatory effect of its monetary policy in the medium term amid increasing inflationary pressure caused by domestic demand.

Decreasing interest rates on bank loans (by 3.6 p.p. and 3.3 p.p. YoY in March 2018 for short-term and long-term loans in AMD, respectively) further encouraged lending. There was an acceleration of growth in loans provided to both households (26.3% in March 2018 vs. 22.1% in December 2017) and businesses (39.4% in March 2018 vs. 33.5% in December 2017).

Interest rates on loans in USD and in AMD still differ considerably (by some 5 p.p.), which helps to reduce the share of bank deposits in USD. As of the end of March 2018, the share of deposits in foreign currency amounted to 54.2% of total deposits, down by 1.5 p.p. YTD (and down by 5.2 p.p. YoY). Both households and businesses decreased their deposits in foreign currency (by 1.8 p.p. and 0.8 p.p. YTD, respectively).

EDB’s priority areas of operation in Armenia in 2013-2017 are as follows:

  • Infrastructure projects to reduce transport dependency and ensure energy security.
  • Export enhancement by providing project and investment finance for mining, metallurgical and processing projects as well as other sectors of priority for Armenia listed in Armenia’s export-oriented industrial strategy.
  • To ensure food security and improve the country’s external competitiveness, the Bank will support agricultural projects envisioning modernisation and the introduction of new technologies, as well as the creation of vertically integrated agricultural enterprises with export potential. The Bank will also support food imports, primarily from the Bank’s member states, on conditions acceptable to the country.
  • Further financing of the banking sector by means of targeted programmes supporting SMEs and export and import transactions with the Bank’s member states.
  • Budget support credit to Armenia
    Construction of the North-South Road Corridor in Armenia
  • Irrigation System Modernization Project in Armenia

Yerevan Representative Office

Erebuni Plaza Business Centre, office 811, 26/1 Sargsyan St., Yerevan, 0010, Republic of Armenia