5.4% GDP growth expected in Armenia in 2026 - minister 

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.