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Armenia's economic decline of 2020 will reach the mark of 7.6% and recover up to 3.4% in 2021, according to the World Bank’s latest economic update for Europe and Central Asia. 

According to the documents, Armenia was making gradual improvements to its business environment, but the COVID-19 pandemic and the war derailed the progress.

“Armenia suffered a severe COVID-19 outbreak, and the country’s conflict with Azerbaijan escalated dramatically in September 2020. Although the November 10th ceasefire halted hostilities, Armenia has since entered a period of heightened domestic political instability. These twin shocks led to a sharp economic contraction, increased poverty, and a fiscal deterioration. Nevertheless, Armenia maintained overall macroeconomic stability and healthy external buffers through the crisis,” the report said.

According to the WB assessment, inequality increased in the region, driven by the pandemic and resulting shutdowns, as well as unequal access to social services and digital technologies. In some countries, children in the poorest two-fifths of households were 20 percent less likely to be engaged in learning than children of the top one-fifth. Women are suffering more violence than previously: 25 percent of respondents in Lao PDR and 83 percent in Indonesia said that domestic violence worsened due to COVID-19.