Are international institutions guiding the authorities?

The evaluations and messages of international institutions regarding Armenia’s economy are important, first of all, based on the authority of these institutions.They are important if we are talking about partners and especially important when it comes to donor structures.

These assessments often give messages about what major problems exist and what their solutions are, but sometimes it seems that they contain certain guiding messages.

The International Monetary Fund has made a forecast for Armenia’s economic growth in the coming years, estimating the potential at 5.5%. However, for potential long-term growth, it is necessary to take into account the foreign trade diversification, labor force integration, and the improvement of the demographic situation.
The problem of diversification of foreign trade is really relevant for us. In particular, in recent years this problem has become even more acute, as evidenced by official data.

In particular, in the main foreign trade directions, the dependence on one direction has increased even more compared to the figures of 2017. If in 2017, Russia had 26.8% of foreign trade, and the EU had 24.1%, then in 2024, both directions have 41.5% and 7.3%, respectively. This happens as the authorities are constantly talking about the actions to diversify the foreign trade.

In terms of demography, the situation is also quite problematic. Current indicators point to a decline in birth rates and an increase in mortality, and if we add to this the potential factor of emigration, the situation begins to cause serious concerns.

According to the World Bank, although Armenia has reformed the tax policy, it is necessary to expand the general taxation field and narrow turnover tax. In essence, this is what the government is doing. Considering the World Bank’s “call” and the government’s unpopular actions, doesn’t the question arise that we may be dealing with some pressure?