Armenia`s GDP projected to grow by 5.4 % in 2026, with deflator rate  of 3%

ArmInfo.Armenia's GDP growth in 2026 is projected to be 5.4%, with a deflator of 3%, and a deficit of 4.5%. "The budget is clearly an investment in human  capital," as stated by Finance Minister Vahe Hovhannisyan  during a  regular meeting on September 25, when presenting the country's draft  state budget for the upcoming year. 

According to him, the  GDP in 2026 is projected to be 11 trillion 933  billion drams. According to the draft, state treasury revenues are  expected to reach 3 trillion 091 billion drams, of this amount 2  trillion 972 billion 850 million drams will come from  tax revenues  and state duties, 20.5 billion drams from official grants, and 97.7  billion drams from other revenues. Community revenues in Armenia in  2026 are estimated to be 347.3 billion drams (including official  grants received from the state treasury).

"As a result of the implementation of measures to improve tax  administration, combat the shadow economy, and enhance tax policy, it  is expected that the tax/GDP ratio will improve by 0.4 percentage  points compared to the expected figure," the head of the Ministry of  Finance stated, emphasizing that this year this indicator is expected  to increase by 1 percentage point compared to the 2024 figure. State  budget expenditures are expected to total 3 trillion 628 billion  drams, with current expenditures amounting to 2 trillion 924 billion  drams and 704 billion drams allocated to capital expenditures (or  5.9% of GDP, compared to 6.6% in the 2025 state budget).

The deficit will reach 537.5 billion drams, or 4.5% of  the GDP  (compared to 609 billion drams, or 5.5%, in 2025). Of this amount,  271.3 billion drams will come from external sources to cover the  deficit, with the remaining 266.2 billion drams from domestic  sources. Vahe Hovhannisyan noted that in the medium term, the  authorities hope to reach 2.8% of the GDP (in 2028). As a result, the  government debt/GDP ratio will increase from 50.7% to 53.5% by the  end of 2026, with an increase of 810.9 billion drams in absolute  terms, reaching a total of 6 trillion 384.7 billion drams.

Regarding the government's priorities, Hovhannisyan noted that, along  with other programs, the implementation of the Universal Health  Insurance system, which the authorities refrained from implementing  in 2025 due to a lack of funds, is planned to begin in 2026. Housing  support for forcibly displaced families from Nagorno-Karabakh (55  billion drams) will continue, as will cashback programs for  pensioners on non-cash payments (20 billion drams) and support for IT  companies. Additionally, 3 billion drams will be allocated for the  airline support program.

A new program for assessing family vulnerability will be launched,  which was piloted in two regions this year. 4.9 billion drams will be  allocated for the Akademic City construction program and 66.2 billion  drams will be allocated for road repairs, transport facilities, and  tunnel and bridge maintenance. 30.6 billion drams of credit resources  will be allocated for the North-South construction program  (Ashtarak-Talin - 34 km, Kajaran-Agarak - 32 km), and construction of  the Kajaran tunnel and tracks will begin. Construction of the  Bargushat tunnel and the Sisian-Kajaran road will also begin in 2026.  Authorities also promise to implement reservoir construction  programs. 2 billion drams will be allocated for the participatory  budgeting program, up from 1 billion drams in 2025.

Allocations to the Ministry of Education, Science, Culture and Sports  will increase from 3.3% to 3.5% in 2026, and to the Ministry of  Health from the current 1.5% to 1.8%. The draft budget will be  submitted to parliament by October 1.