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.
