“In 2024, the unemployment rate in Armenia increased by 1.5 percentage points compared to the previous year, reaching 13.9 percent,” he told lawmakers during a meeting that discussed the Armenian government’s execution of the 2024 state budget.
Hovannisian did not explain in detail the reasons for the increase. The government had pledged to reduce the unemployment rate to below 10 percent by 2026.
Hovannisian cited government data that shows the Armenian economy growing by 5.9 percent last year, down from 8.3 percent in 2023 and 12.6 percent in 2022. The government has forecast a 5.1 percent growth rate for 2025.
The slowdown is widely attributed to dwindling positive knock-on effects of Western sanctions against Russia. Armenian entrepreneurs have taken advantage of the sanctions by re-exporting many Western-manufactured goods to Russia. This was the main driving force behind Armenia’s strong macroeconomic performance in 2022 and 2023.
The robust growth has also not translated into a significant drop in poverty. The country’s official poverty rate dropped by only 2.7 percentage points, to 23.7 percent, since 2021. Prime Minister Nikol Pashinian’s cabinet had pledged to cut it by half by 2026.
Some analysts believe that the growth driven by lucrative re-exports to Russia has had a limited socioeconomic impact because it has mainly benefited a narrow circle of individuals and businesses.
Speaking at the meeting in the Armenian parliament boycotted by the opposition, Pashinian defended his government’s economic track record. He singled out official statistics showing that the average monthly wage in the country has soared by around 75 percent, to almost 305,000 drams ($782), since he came to power seven years ago. The consumer price index has increased by 25 percent during the same period, he said, adding that this means “people in Armenia live about 50 percent better” than in 2018.
Many of those people feel that the seven-year rise in the cost of living has been far more substantial. Also, economists may argue that the wage increase results in part from a government crackdown on tax evasion and, in particular, widespread underreporting of workers’ salaries.
