Armenia's poverty rate exceeds 40% despite economic growth, economist says

Armenia’s poverty rate exceeds 40%, with some regions experiencing levels above 60%, despite official data showing robust economic activity growth, economist Tatul Manaseryan said in an interview to Panorama.am on Tuesday.

According to the Statistical Committee, Armenia recorded 9.2% economic activity growth in 2025. However, the same report showed exports fell by 36% and imports by 24%.

Manaseryan, a doctor of economic sciences and professor, attributed the export decline largely to a sharp drop in re-exports. He said the economic activity indicator does not reflect processes affecting human development and living standards, arguing that household incomes have declined and poverty has risen.

He pointed to cuts in social assistance in 2025, including support provided to low-income families and displaced people from Artsakh (Nagorno-Karabakh). These reductions, he said, were not offset by income growth and have worsened social conditions.

“Economic growth should lead to job openings and rising income, which in turn reduce poverty,” Manaseryan said. “This has not happened.”

He questioned government claims that 300,000 new jobs have been created in recent years. Official data show 212,000 unemployed in 2017 and 195,000 unemployed in 2024, according to figures published in 2025. If 300,000 new jobs had been added, unemployment should have fallen much more sharply, he argued.

Authorities have said part of the increase reflects the formalization of previously undeclared employment. Manaseryan said this represents a reduction in the shadow economy rather than the creation of new jobs.

He also said domestic production has declined, including in agriculture and livestock, citing higher feed costs and reduced herd numbers. As a result, prices for meat, dairy, fish and bread have risen by double-digit rates, he said.

While the consumer price index remains within official targets, Manaseryan argued it reflects average price changes across roughly 500 goods and does not capture sharp increases in essential items.

He criticized wage policies, saying salaries have not kept pace with inflation and that social benefits have been reduced. At the same time, he said, senior officials’ pay and bonuses remain high.

Referring to pensions and benefits, he said the government’s decision to increase them by 10,000 drams was not envisaged by the 2026 state budget law and could require reallocations from other spending items. He described repeated deviations from approved budgets over the past seven years as a sign of weak fiscal management.

“The state budget is not a pile of numbers; it is a development program for the economy,” Manaseryan said, calling for clearer long-term targets and stricter adherence to budget legislation.