Creating more jobs, raising productivity and applying targeted fiscal policy tools are key to reducing poverty and strengthening economic resilience in Armenia, according to a newWorld Bank Group report released today.
Armenia’s Economic Pulse: Pursuing Poverty-Reducing Growth with More Impactful Fiscal Policy finds that while Armenia has made meaningful progress in economic growth and reducing poverty, too many families remain one shock away from falling back. Poverty fell to 21.7 percent in 2024, but about two in three Armenians remain poor or vulnerable. To ensure economic growth continues to improve people’s lives, Armenia will need to strengthen social protection and create more formal and better-quality jobs.
“Armenia has made important progress in reducing poverty, but sustaining these gains will require better jobs and more effective social protection,” said Fabrizio Zarcone, World Bank Group Country Manager for Armenia. “Going forward, identifying the policies that can foster more productive and formal employment will be an important priority to help sustain poverty reduction and shared prosperity.
The biannual report is structured in two parts: an assessment of recent macroeconomic developments and outlook, and a special focus chapter, which for this edition, examines how fiscal policy and labor market outcomes shape poverty and inequality in Armenia.
Read also
The special focus chapter finds that poverty is concentrated in rural areas and regions such as Shirak, Tavush, and Armavir, and is closely linked to low-productivity employment in agriculture, self-employment, and informal work. Although agriculture accounts for roughly one-quarter of total employment, it represents one-third of all employed poor workers, illustrating that there is a disproportionate concentration of poor people working in the agricultural sector and that having a job that is productive enough to generate sufficient income is key to protecting people from poverty
Formal jobs matter not only for today’s incomes, but also for tomorrow’s retirement security. Over time, as pension benefits depend more directly on what people earn and contribute during their working lives, long-term sustainability will require more people to participate in formal employment and contribute to the pension system. Currently, only around 40 percent of the working-age population contributes to the pension system.
The report recommends strengthening both job opportunities and social protection. Over the longer term, creating more formal and productive jobs through investments in skills will be essential to reducing poverty sustainably. At the same time, improving the effectiveness of social assistance and strengthening the pension system will help protect vulnerable households.
Press release
