ArmInfo. In 2026, capital expenditures of the Armenian state treasury are planned at 5.9% of GDP, compared to 6.6% of GDP, budgeted for 2025. At the same time, the share of current expenditures in total expenditures is planned to increase from 78.6% to 80.6%, as stated in the message to the draft budget for next year.
According to the document, with GDP growth at 5.4% and a deflator of 3% (a 5.2% increase is expected this year with a deflator of 2.6%), state treasury revenues are projected at 3 trillion 091 billion dram. Of this amount, 2 trillion 972 billion 850 million drams will come from taxes and state duties, 20.5 billion drams from official grants, and 97.7 billion drams from other revenues.
State budget expenditures are expected to reach 3 trillion 628 billion drams. Out of this, 2 trillion 924 billion drams (24.5% of GDP) will be allocated for current expenditures, up from 2 trillion 706.8 billion drams for the current year (24.9% of GDP). Last year, the actual figure was 2 trillion 413.6 billion drams (23.7% of GDP).
Growing current expenditures
In 2026, over 274.6 billion drams will be allocated from the state budget for wage payments, which is 5.2%, or 13.6 billion drams, more than the approved budget for 2025. Interest expenses in 2026 will amount to 423.2 billion drams. Additionally, subsidies to organizations in 2026 are planned to be 212.4 billion drams, which is 10.1%, or 19.4 billion drams, more than the approved budget for 2025.
The increase in current expenditures in 2026 will be largely driven by increased state budget spending on social benefits and pension payments (1 trillion 285.8 billion drams). This is a 17.8% increase, or 193.9 billion drams, compared to the approved 2025 budget.
For grants, 310.5 billion drams will be allocated, which is 6.7%, or 22.4 billion drams, less than the approved 2025 budget. Additionally, 417.9 billion drams will be allocated for the purchase of services, goods, and other expenses, which is 3.7%, or 16.2%, more than the approved budget for the current year.
Capital expenditures will decline
In 2026, 19.4% of total expenditures will be spent on non-financial assets (in 2025, this figure was planned at 21.4%). Specifically, 704.1 billion drams will be allocated for capital expenditures (expenditures on non- financial assets), compared to 734.8 billion drams budgeted for 2025. In 2024, this figure was 541.7 billion drams, or 5.3%.
"The 2026 state budget expenditures aim to achieve fiscal consolidation and strengthen the economic and defense infrastructure in the medium term. Accordingly, in the medium term, the share of current expenditures in GDP will decrease, while capital expenditures will remain significantly above historical levels. The share of capital expenditures in GDP will stabilize at 5.7% by 2028, while current expenditures will gradually decline from an expected 24.6% in 2025 to 23% of GDP in 2028," noted the authors of the budget message, represented by the Ministry of Finance of Armenia.
Note that according to the Ministry of Finance, state budget expenditures for the first eight months of this year amounted to 1 trillion 929.2 billion drams, an increase of 12.9% compared to the same period last year. Over the same period, current expenditures amounted to 1 trillion 575 billion drams, a 7.7% increase. Transactions involving non-financial assets amounted to 354.2 billion drams, with expenses on non- financial assets (capital expenditures) amounting to 356.5 billion drams, a 39.3% increase from the previous year.
