Unemployment Reaches 14% in Armenia Despite Strong GDP Growth

Unemployment in Armenia climbed to nearly 14% in 2024, a worrying increase even as the country’s economy continued to grow, Finance Minister Vahe Hovannisyan announced on Wednesday.

Speaking to members of parliament during a session on the 2024 state budget, Hovannisyan revealed that the unemployment rate rose by 1.5% points compared to the previous year, reaching 13.9%. This is a troubling sign for many Armenians, especially since the government had promised to lower unemployment to under 10% by 2026.

The minister did not provide detailed reasons for the rising unemployment. Instead, he focused on the economy’s overall performance, highlighting a 5.9% growth in 2024. While this growth rate is positive, it has slowed down compared to 8.3% in 2023 and an impressive 12.6% in 2022. For 2025, the government forecasts a 5.1% growth rate.

Many experts say the slowdown is linked to changes in regional trade dynamics, particularly because Armenia benefited heavily in recent years from Western sanctions on Russia. Armenian companies took advantage of these sanctions by re-exporting Western goods to Russia, which helped boost the economy in 2022 and 2023. However, this source of growth is now fading.

Despite the growth numbers, many Armenians see little improvement in their daily lives. Official figures show that the poverty rate has only fallen by 2.7% points since 2021, reaching 23.7%. This is far from the government’s promise to cut poverty in half by 2026. Some analysts warn that the economic gains from re-exports have mostly helped a small group of businesses and wealthy individuals. This means the wider population has not seen significant benefits from the recent growth.

At the parliamentary session, which the opposition boycotted, Prime Minister Nikol Pashinyan defended his government’s record. He pointed to statistics showing that the average monthly salary has increased by about 75% since he took office seven years ago. According to Pashinyan, this means people are living around 50% better than in 2018, even after considering a 25% rise in prices.

Yet many Armenians feel the cost of living has risen more sharply than official numbers suggest. The wage increases may also reflect government efforts to reduce tax evasion and force employers to report true salaries, rather than real income growth for workers.

It is clear that economic growth alone cannot solve Armenia’s problems. The benefits must reach a wider segment of the population, and urgent, decisive steps are needed to address high unemployment and ongoing poverty. As doubts grow over the government’s promises for 2026, many Armenians are calling for real, meaningful change—not just numbers on paper.

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