By Siranush Adamyan
Armenia will need a new growth model centered on productivity, innovation and export diversification if it wants to sustain the rapid economic expansion of recent years, according to the World Bank's latest report, Armenia Economic Update: Boosting Productivity for Sustainable Growth.
The report argues that the drivers behind Armenia's recent economic success are unlikely to be sufficient over the longer term. Instead, future growth will depend on raising productivity, expanding technological capabilities, diversifying exports and integrating more deeply into global markets.
The World Bank says improving productivity should become the centerpiece of economic policy. That includes encouraging innovation, strengthening competition, improving firms' access to finance, investing in skills and creating conditions that allow businesses to move into higher value-added activities. It also calls for stronger integration into international value chains to support export-led growth.
The report notes that Armenia has made significant progress in reducing poverty, but warns that many households remain economically vulnerable. Employment alone is no longer enough to ensure rising living standards, as many Armenians work in low-productivity, informal jobs that generate unstable incomes. Job quality, rather than employment rates alone, will determine whether poverty reduction continues.
According to the World Bank, improving labor productivity will require sustained investment in education and skills, better alignment between workers' qualifications and employers' needs, and greater access to formal employment. These measures would support both higher incomes and more resilient long-term growth.
The report concludes that maintaining high growth will require Armenia to move beyond the model that has driven the economy in recent years. Instead, long-term prosperity will depend on productivity gains, technological development, export diversification and deeper international economic integration.
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