Armenia's Economic Pulse : Pursuing Poverty-Reducing Growth with more Impactful Fiscal Policy

Overview & Synopsis

Although Armenia has sustained impressive economic growth in recent years, the benefits of that growth have not reached all Armenians equally. Poverty has declined, but the gains remain fragile: a large share of households cluster just above the poverty line, highly exposed to shocks and with limited capacity to build resilience. Labor markets continue to generate insufficient quality employment, trapping many workers in low-productivity, informal activities that cannot sustain adequate living standards. Meanwhile, the fiscal system — though redistributive in intent — relies heavily on a narrow set of instruments, particularly pensions, raising concerns about both its poverty-reducing effectiveness and its long-term sustainability. This edition of the CEU speaks directly to these challenges. It finds that sustaining and deepening welfare gains in Armenia will require more than continued growth. It will demand deliberate policy action to improve job quality, strengthen the design and targeting of fiscal tools, and build the capacity of households — particularly the most vulnerable — to generate stable and sufficient incomes. The authors hope this report serves as a valuable resource for policymakers, development partners, and all those committed to advancing inclusive growth in Armenia.