Armenia’s economic growth is unstable

In light of claims about a growing economy and an increasing but efficient and at the same time non-threatening public debt, it is important to try to understand which qualitative characteristics of the economy refute or confirm these assertions.

Of course, the main directions for assessing economic growth, its structure, and, so to speak, its quality are the sectors considered key, including industry. What trends does it demonstrate?

From January to November 2025, industry grew by 0.5%, with mining increasing by 4.1%, while manufacturing declined by 1.9%.

In fact, manufacturing continued to decline during this period. Why is this happening, and are there any prerequisites for the recovery of the sector?

The decline is largely due to the neutralization of external factors, particularly the effect of gold re-exports, which led to a 28.2% drop in non-ferrous metal production. With this external factor—previously a positive driver—now diminished, the overall performance of the sector has turned negative.

But have these effects completely disappeared at this point? It is certainly interesting that, despite the decline compared to the cumulative indicator for January–November 2024, production statistics in this sector increased by 30.3% compared to the previous month, and by 2.9 times compared to November of last year. Does this not give us reason to assume that we are now under the influence of a new wave of external impact?

As for recovery trends in some branches of manufacturing, such as food production and tobacco products (+6.9% and +42% respectively): although some subsectors of manufacturing are recovering, do the rates of this recovery correspond to the pace of public debt growth?

Ultimately, Armenia’s economy is highly sensitive to external shocks. Such influences can drive growth, but just as easily trigger decline. This vulnerability is itself a qualitative characteristic of the economy and its growth, underscoring that Armenia’s economic development is unstable.