Armenias economic growth remainedresilient in 2014. Output expansion slowed to 3.4 percent in2014, relative to 3.5 percent in the previous year. On thesupply side, while services particularly transport andtelecoms), agriculture, and manufacturing performed well,construction, mining, and energy made negative contributionsto output growth. On the demand side, net exports were themain contributor to growth, offsetting weak privateconsumption and negative private investment. However, by thelast quarter, Russias economic slowdown and the steepdepreciation of the ruble began to depress remittances, FDIinflows, and exports. Few jobs were created during the year,and the unemployment rate reached to 17.6 percent in 2014. Aweak labor market, combined with slower emigration andreturn migration from Russia, are likely to have underminedgrowth in the incomes of the poor. Declining remittances andhigher inflation in the last few months of 2014 reinforcedthese trends. Poverty at US$2.5/day was 30.2 percent in2014, still above the levels recorded in the period leadingup to the 2008 financial crisis. Fiscal policy continued tobe prudent throughout the year, and monetary tighteningresponded to the currency depreciation. Developments inRussia will adversely affect economic growth in 2015,underscoring the needfor Armenia to press ahead withstructural reforms.
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