The Central Bank’s updated end-of-year forecast highlights an important shift: an attempt to move away from crisis-driven and exogenous growth toward a more structured and manageable economic model. At the same time, despite their apparent optimism, the figures raise questions about the quality of growth and the sustainability of the macroeconomic framework.
Notably, the IMF and World Bank forecasts for Armenia’s GDP growth are generally more cautious than those of the Central Bank. This reinforces the perception of restrained optimism on the part of the national regulator.
GDP growth: slowdown as the new “normal”
The Central Bank expects GDP growth of 4.1–6.3% in 2026 and 4.9–5.3% in 2027. According to final data, the economy will grow by 5.9% in 2025 — the same rate as in 2024. This confirms that the period of double-digit growth recorded in 2022 has already passed.
On the one hand, these rates remain high compared with most countries in the region and Europe. On the other, they largely reflect the high base effect of previous years and economic inertia rather than a fundamental boost in productivity or high value-added exports.
Nominal GDP will continue to rise, reaching AMD 12–12.3 trillion in 2026 and AMD 13–13.3 trillion in 2027. However, this growth is primarily nominal in nature.
Inflation under control, with reservations
Inflation for last year is expected to stand at around 3.6%, within the new target range of 3% ±1 percentage point. After the unusually low inflation of 2024 (1.5%), this is seen as a return to a more “normal” price environment.
At the same time, the dynamics of non-tradable goods and services deserve attention. After declining in 2025, inflation in this rigid-price segment is projected to accelerate again in 2026–2027, reaching up to 4%. This indicates that internal structural constraints — low competition, high service costs, and limited productivity growth — have not disappeared.
External trade: painful adjustment and weak recovery
The most alarming part of the forecast concerns export and import dynamics. After a sharp increase in 2023 and a decline in 2024, another contraction is expected in 2025: exports by up to −37% and imports by up to −32%.
In effect, this reflects a rapid reduction in temporary trade flows formed in previous years due to geopolitical shifts and re-exports. The recovery projected by the Central Bank for 2026–2027 remains modest — only 3–4% annual growth, insufficient to ensure qualitative changes in the export structure.
This is also confirmed by the current account forecast. The deficit is expected to remain at 4–5% of GDP, continuing to be one of the economy’s chronic vulnerabilities.
No clear external “anchor”
The share of remittances in GDP is stabilizing at around 3.2%. This once again shows that transfers are no longer a key driver of economic growth and instead play more of a stabilizing role, cushioning social and consumption fluctuations.
The fiscal outlook remains tense. In 2025, the budget deficit is set to rise to 5.4% of GDP, well above relatively stable levels. Although a reduction is expected in 2026–2027, the overall trend is clear: the state is increasingly assuming the role of demand stimulator.
In the short term this may be acceptable. However, in the context of weak export performance and limited income growth, it could increase debt and inflationary pressures in the future.
The international environment is also ambiguous: slower growth in the US and the eurozone, near-stagnation in Russia, declining oil prices alongside rising prices for copper and food commodities. For Armenia, this means there is no clearly favorable external “anchor”: some factors work in its favor, while others work against it.
Stability without a qualitative breakthrough
The Central Bank’s forecast suggests that Armenia’s economy is entering a phase of moderate but unstable growth. Overall macroeconomic stability is being maintained, and inflation remains under control.
However, a qualitative breakthrough driven by exports, productivity, and investment is not yet visible. Without structural reforms, diversification of external trade, and reduced dependence on temporary factors, growth risks remaining “attractive in numbers” but limited in substance.
This gap between quantitative growth and qualitative development is likely to become the main challenge for Armenia’s economic policy in the coming years.