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Booming Armenian economy vulnerable to war trends

Monday, February 20, 2023


The war in Ukraine has driven large movements of people and capital into Armenia's small economy, fuelling double-digit GDP growth in 2022. Trade with Russia has boomed as supply chains are reshaped under the impact of sanctions.


  • Strong economic performance has boosted Armenia's fiscal position but spending restraint will prevail due to inflation concerns.
  • Foreign investment is more stable but the rapid growth of non-resident banking deposits raises financial vulnerability.
  • The pressure on housing markets brought by Russian arrivals is creating some local discontent.

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