Martin Galstyan:  Armenia`s economic growth is projected to be  4.9-5.3%  in 2025

ArmInfo.  Economic growth in Armenia in 2025 is projected to be 4.9-5.3%, but recent trends suggest that higher growth rates may be achieved by the end of the  year, as stated by Chairman of the Central Bank  Martin Galstyan in  his speech in parliament on September 9.

He described the conditions that have led to this growth range: "In  the first two quarters of 2025, the global economy still faces risks  of slowing growth. In particular, the US saw a slowdown in economic  growth  at the end of 2024, which is due to the uncertainty of  prospects against the backdrop of the policy being pursued.  Russia  has also seen a gradual weakening of economic activity, with growth  being driven by domestic consumption, particularly in the services  sector. In China, economic growth is also slowing down due to  weakening domestic demand. In the Eurozone, economic growth remains  low."  Galstyan added that inflation in the global market continues  to slow down, but in Armenia's trading partner countries, goods and  services with rigid prices are still relatively expensive. Food  prices in international markets have also risen on an annual basis.  Furthermore, there are risks in the international commodity market  due to potential disruption in price and supply  chains stemming from  geopolitical problems  in the Middle East in early 2025 and growing  tensions in international trade relations. On the other hand, with a  further weakening of global demand, deflationary pressure may emerge.  "In this context, the central banks of leading countries will most  likely maintain relatively tight monetary conditions in the near  future," Galstyan believes.

 Since the beginning of 2025, economic activity in Armenia has  remained at the level  of assumed long- term stable growth. In recent  months there have even been trends of  growth acceleration, which are  conditioned, particularly, by noticeably activity in the export  sector. Specifically,  its about the tourism, IT sector, and the  financial sector. During the current year, economic growth  continued  to considerably contribute to the high growth of the construction  sector. Nevertheless, according to Galstyan, the volatility of  economic growth is influenced by some short-term factors which  contain high uncertainty  regarding the sustainability and long-term  prospects of  economic growth, as well as future trends in domestic  demand.  "Despite the increased external demand for services in  recent months, gross demand from the point of view of inflation is  still assessed as neutral. At the same time, support risks remain,"  he noted.

In August 2025, annual inflation was 3.6%, mainly due to seasonal  food products and fluctuating growth in prices of individual  components. However, there is still a deflationary influence from  outside on prices of non-food products, which is mainly due to lower  prices from Chinese manufacturers. In addition, at the beginning of  the year, in line with expectations, tariffs in the transportation  sector increased. In parallel to this,  core inflation, reflecting  the cost of non-exportable goods with relatively rigid prices, has  remained relatively stable, having formed in recent months at of  2-2.5%. In these conditions, inflation expectations continued to move  downwards, approaching the target level (3%, +/- 1 p.p.), which was  facilitated by the stable inflation environment that has been  maintained for a long time. Further addressing  deputies' questions,  Galstyan noted that the implementation of such a monetary policy by  the Central Bank of Armenia, has achieved high economic growth and  stable inflation, compared to neighboring countries,

 "It would probably be difficult to imagine a better macroeconomic  environment in which there is investment activity in the current  geopolitical situation." Regarding the facilitating nature of the  Central Bank's policy on the loan portfolio of banks, he noted that  in recent years this indicator has demonstrated good growth rates,  with 20% provision in the first half of 2025 alone. He also  emphasized that the share of toxic loans is now at a historically low  level. Speaking about the Central Bank's actions to develop the  capital market and the financial sector, he said: "A joint program  for the capital market development has been created in collaboration  with the government, the Ministry of Finance and the Ministry of  Economy, and the Central Bank is the main responsible for the  sub-structural component - the creation of a stock exchange platform  and the distribution of pension funds.

 Regarding the latter, he recalled that a law has been adopted  according to which 10% of assets can be directed to the real economy:  "I think we will soon witness the first investment and we are talking  about promising projects, and the Central Bank has a certain role in  this." He informed that the total capital of the banking sector today  is 1.8 trillion drams, noting: "There is no other sector of the  economy or system with such capital in Armenia." In response to a  deputy's question about rates, he said that the refinancing rate is  set at 6.75%, the yield on 10-year government bonds is 10%, and the  mortgage rate fluctuates on average in the range of 12-13%. "In the  region, our interest rates are the lowest, with Georgia showing a  similar trend," Galstyan noted.