Armenia`s national debt to reach 55% of GDP next year - draft budget 

ArmInfo. By the end of 2025, Armenia's public debt will increase by 695 billion drams ($1.82 billion), reaching 5 trillion 820 billion drams, or 52.9% of GDP. By  the end of 2026, it will reach 6 trillion 569 billion drams, or 55% of GDP. The share of debt denominated in foreign currency will continue to increase.

This is stated in the address to the draft budget for next year, which was approved by the Cabinet of Ministers on September 25.

"The government debt level will reach 54-55% of GDP in 2026-2028,  after which, as a result of a consistent reduction in the budget  deficit (from 5.5% of GDP in 2025 to a gradual decline to 2.8% of GDP  in 2028), it will approach 50% by 2030," the authors of the document,  representing the RA Ministry of Finance, note.

According to the document, by December 31, 2025, the Armenian  government's debt will increase from 48% of GDP or 4 trillion 892.8  billion drams ($12 billion 338.2 million) in 2024 to 5 trillion 573.8  billion drams or 50.7% of GDP ($14 billion 147.4 million).

Of this, external debt (the RA government's debt obligations to  international organizations and foreign countries, as well as funds  received from the issuance of Eurobonds) will amount to 2 trillion  945 billion drams, or 26.8% of GDP (compared to 2 trillion 592  billion drams, or 50.3% of GDP, in 2024). The RA government's  domestic debt (liabilities to residents of the country) is projected  to be 2 trillion 875 billion drams, or 26.1% of GDP (compared to 2  trillion 533 billion drams, or 24.9% of GDP, last year). Over the  course of the current year, the Central Bank's debt will increase  from 232 billion drams in 2024 (2.3%) to 246 billion drams (2.2% of  GDP).

By the end of 2026, government external debt will increase to 53.5%  of GDP, or 6 trillion 384.7 billion drams ($15 billion 331.5  million). Of this, external debt will account for 28.2% of GDP (3  trillion 359 billion drams), and domestic debt will account for 26.9%  of GDP (3 trillion 210 billion drams). Central Bank debt will  decrease to 1.5% of GDP, or 184 billion drams.

By the end of this year, dram-denominated debt is expected to  decrease from 50.8% of government debt to 49.7%. This trend will  continue into 2026, reaching 48.6% by December 31. The share of  domestic debt will also decrease from 51.8% in 2024 to 51.6% in 2025  and 50.3% in 2026.

The average weighted interest rate on public debt in 2026 will be  7.1%. Government debt servicing costs (interest payments) will amount  to 3.5% of GDP (423.2 billion drams, compared to an expected 381.1  billion drams this year and an actual 313.6 billion drams in 2024).

Net financing of the RA state budget deficit through debt instruments  for 2026 will amount to 597.1 billion drams, of which 318.1 billion  drams will come from government treasury bonds and 278.9 billion  drams from external sources.

In 2026, 1 trillion 053 billion drams will be required for repayment  and servicing of the public debt, of which 629.8 billion drams will  be debt repayments and 423.2 billion drams will be interest payments.

In accordance with the requirements of Part 8.1 of Article 21 of the  RA Law "On the Budget System of the Republic of Armenia," the  exchange rates for Armenian drams established on the RA foreign  exchange market as of September 1 of this year were used in  calculating the 2026 state budget of the RA.  Specifically, the  dollar is at 382.61 drams, the euro is at 448.42 drams, the pound  sterling is at 517.52 drams, and the Russian ruble is at 4.74 drams.

According to the Law on the State Budget of the Republic of Armenia  for 2025, the public debt by the end of the year will amount to 6  trillion 159 billion drams, or 56.5% of GDP.

Government debt is expected to be 5 trillion 910.4 billion drams ($13  billion 963.1 million), or 54.3% of GDP. In 2025, the government will  require 1 trillion 117.1 billion drams for debt repayment and  servicing alone, of which 723 billion drams will be for repayment and  394.1 billion drams for interest payments.  3.6% of GDP will be used  to service the government debt.