The British Reuters agency has covered Armenia’s economic development indicators, presented the process of Armenia’s Eurobond placement, and, with the help of experts, made a comparison with the indicators of the countries of the region. The agency emphasized that when the Republic of Armenia placed new Eurobonds two months ago, demand exceeded supply fourfold, highlighting the newly acquired attractiveness of the small former Soviet republic among investors seeking income in a world of negative interest rates. 
“After last year’s peaceful protest demonstrations, thanks to which a reform-minded government was formed, Armenia’s economy has begun to grow faster than oil-rich neighboring Azerbaijan, increasing investors’ willingness to lend to the landlocked nation of three million people.
Prime Minister Nikol Pashinyan’s government has adopted a reform program aimed at strengthening Armenia’s institutions and the rule of law, improving the business environment and stepping up the fight against corruption.
The program envisages raising the share of investments in gross domestic product (GDP) to 23-25 percent over the next four years, from the current around 20 percent, and increasing the export/GDP ratio from 37 percent to 43-45 percent,” the article said.
“After the 2018 revolution, hopes arose that the new government would move decisively forward with structural reforms and, in particular, the fight against corruption. So far, the government is moving in the right direction, reinforcing those hopes, as evidenced by the government program adopted at the beginning of the year,” Lisa Yermolenko, economist for emerging Europe at Barclays, told the Reuters agency.
It was noted that in September Armenia entered the international market for the third time, placing 10-year Eurobonds worth 500 million US dollars, for which demand exceeded 2 billion US dollars. At the same time, Armenia bought back most of its first Eurobonds issued in 2013, which are due for redemption in September 2020.
“The yield on the Republic of Armenia’s Eurobonds maturing in 2025 stands at 3.9 percent, which is higher than the corresponding figures for Azerbaijan’s and Uzbekistan’s bonds maturing in 2024, at 3.3 and 3.5 percent respectively. In JPMorgan’s emerging market bond indices, the price of Armenia’s Eurobonds has risen by about 14 percent since the beginning of the year, compared to a 9.4 percent rise in the price of Georgia’s Eurobonds,” the article said.
“Armenian bonds have outperformed many similar bonds in the region this year, which means investors clearly trust the continued reforms,” said Igor Rapokhin, fixed income strategist at VTB Capital.
It was noted that given the record-low yields registered in much of the developed world, many investors sought riskier emerging markets to invest their money. Unlike many large emerging markets, such as Turkey or South Africa, which are in a state of some instability, small countries implementing reforms are attracting the attention of fund managers.
Steady economic growth
The article noted that in the second quarter of 2019, economic growth in Armenia stood at 6.5 percent compared to the same period of the previous year. This week, the Central Bank raised its forecast for current-year GDP growth from 4.9 percent to 6.9-7.1 percent, driven by positive trends in the industry and services sectors.
“Since the collapse of the Soviet Union, Armenia has relied heavily on the mining and agriculture sectors, but the main sectors contributing to last year’s 5.2 percent growth were tourism, information technology and light industry, such as the textile industry. The country still remains heavily dependent on Russia’s support and investments, whose economic downturn in recent years has negatively affected Armenia’s exports, as well as money transfers made by Armenians working in Russia, but officials say the ratio of remittances to GDP is gradually declining.
