ArmInfo. Discussions on the draft 2026 state budget of Armenia began at a joint session of the National Assembly committees on October 27.
Presenting the document, RA Finance Minister Vahe Hovhannisyan noted that the draft projects GDP growth at 5.4% and a deflator of 3% (this year, 5.2% growth is expected with a deflator of 2.6%). State treasury revenues are projected at 3 trillion 091 billion drams, of which 2 trillion 972 billion 850 million drams will be tax revenues and state duties, 20.5 billion drams will be official grants, and 97.7 billion drams will be other revenues. State budget expenditures are expected to amount to 3 trillion 628 billion drams. Of this, 2 trillion 924 billion drams (24.5% of GDP) will be current expenditures, up from 2 trillion 706.8 billion drams (24.9% of GDP) for the current year. Last year, the actual figure was 2 trillion 413.6 billion drams (23.7% of GDP).
The state budget deficit of 597.1 billion drams next year will amount to 4.5% of GDP, compared to 5.5% this year. The deficit is planned to be financed through government treasury bonds and external sources. Non-financial assets will account for 19.4% of total expenditures in 2026 (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. The 2026 state budget expenditures are guided by the goals of ensuring fiscal consolidation and strengthening economic and defense infrastructure in the medium term. Accordingly, in the medium term, the share of current expenditures in GDP will decrease, and capital expenditures will stabilize at a level significantly above historical levels.
In 2026, over 274.6 billion drams will be allocated from the state budget for wage payments, an increase of 5.2%, or 13.6 billion drams, compared to the approved 2025 budget. Interest expenses in 2026 will amount to 423.2 billion drams. In 2026, it is planned to provide subsidies to organizations in the amount of 212.4 billion drams, an increase of 10.1%, or 19.4 billion drams, compared to the approved 2025 budget.
The increase in current expenditures in 2026 will be largely due to an increase in state budget expenditures on social benefits and pension payments (1 trillion 285.8 billion drams), which will increase by 17.8%, or 193.9 billion drams, compared to the approved 2025 budget. AMD 310.5 billion will be allocated for grants, which is 22.4 billion drams or 6.7% less than the approved 2025 budget. AMD 417.9 billion 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.
It should be noted that, according to the Ministry of Finance, state budget expenditures for the first eight months of this year amounted to AMD 1 trillion 929.2 billion, an increase of 12.9% compared to the same period last year. Over the same period, current expenditures amounted to AMD 1 trillion 575 billion, an increase of 7.7%. Transactions with non-financial assets amounted to 354.2 billion drams, of which expenses on non-financial assets (capital expenditure) amounted to 356.5 billion drams, an increase of 39.3% compared to the same period of the previous year.
