Armenian inflation hits 3.3% in 2025: Sharp rise in  food and service  costs

ArmInfo. Inflation in the Armenian consumer market accelerated to 3.3% in January-December 2025, more than doubling the 1.5% in recorded in 2024.

The surge was  primarily driven by a 4.6% increase in food prices and a 3.1%  increase in service tariffs, along with a slight increase in non-food  prices of 0.9%. A year earlier, food and services saw less noticeable  increases of 2.2% and 2.5%, respectively, while non-food prices fell  by 1.8%, according  to the latest data from the Statistical Committee  of the Republic of Armenia. The average monthly growth in prices on  the consumer market amounted to 0.3% in January-December 2025,  compared to 0.1% growth in 2024.

Year-on-year (compared to January-December 2024), inflation also  accelerated to 3.3% (from 0.3% a year earlier), driven by a 5.1%  increase in food prices and a 3% increase in services, with a slight  increase in non-food prices of 0.1%. In January-December 2024,  compared to January-December 2023, both food and non-food products  fell in price - by 1.2% and 0.8%, respectively, while tariffs for  services slightly slowed in growth to 3%. Vegetable prices fell by  7.5% from January to December 2025 (following a reversal in 2024 from  a 6.6% decline to a 9.7% increase), while fruit prices rose by only  0.7% (following a reversal in 2024 from a 0.7% increase to a 0.1%  decline). In December alone, vegetables increased in price by 12.5%,  while fruit prices increased by only 0.1%, compared to a 12.2% and  2.4% increase in December 2024.  Among food products, the prices of  cocoa also increased by 31.9% in 2025, trout by 18.3%, lamb by 14.1%,  pork by 12.7%, beef by 11.7%, peas by 10.4%, coffee by 9.5%,  buckwheat by 9.4%, sunflower oil by 8.2%, pasta by 7.9%, margarine by  7.4%, butter by 7.2%, eggs by 7.2%, milk by 4.7%, cheese by 4.6%,  poultry by 4.3%, spelt by 4.1%, bread by 3.6%, wheat groats  by 2.6%,  flour by 2.4%, sugar and granulated sugar - by 1.1%. Cigarette price  growth accelerated significantly, from 1.1% in 2024 to 8.7% in 2025.   Among alcoholic beverages, vodka increased in price more  significantly in 2025, by 7% (compared to a 9.5% increase in 2024),  while beer and wine increased more moderately, by 2.3% and 2.1%,  respectively.  Compared to 2024, when vodka and beer increased more  significantly, by 9.5% and 3.3%, respectively, and wine fell by 1.5%.

In the non-food market, jewelry prices accelerated in 2025, from  14.8% to 39.2%. Medication prices slowed slightly, from 3.5% to 3.1%.  Medical equipment prices, after a 3.1% decline in 2024, rose by 5.2%  in 2025. Prices for footwear also began to grow - by 1% (compared to  a 1.2% decline in 2024), construction materials - by 0.5% (compared  to a 2.4% decline in 2024), disposable household goods - by 0.5%  (compared to a 5% decline in 2024), tableware and kitchen utensils -  by 0.2% (compared to a 1.4% decline in 2024), and furniture - by 0.1%  (compared to a 1.5% decline in 2024). Over 2025, gardening tools have  become cheaper - by 5% (after a 5.7% increase in 2024), large  household electrical appliances - by 0.7% (after a 2.4% increase in  2024). The decline in clothing prices has slowed down significantly -  from 3.4% to 0.1%.

Gasoline and diesel fuel prices fell by 0.8% and 0.9% in 2025, while  in 2024 there was a noticeable decline of 6% and 9.4%. Moreover, in  January-December 2025, compared to January-December 2024, gasoline  and diesel fuel prices fell by 2.2% and 4.1% (compared to a rise of  14.8% and 1.7% the previous year). In the service sector, the most  significant price increases were for transportation services - by  24.5% (compared to 5.8% in 2024), comprehensive recreation services -  by 15.5% (compared to 15.6% in 2024), hairdressing and spa services -  by 11.3% (compared to 4.6% in 2024), and preschool, primary, and  higher education - by 8.7-8.5% (compared to 12.3-7% in 2024). In  2025, the growth of tariffs for medical services slowed from 3.6% to  2.1%, but dental services and doctor consultations continued to  increase more significantly - by 5.3% and 2.3%, respectively. In  2025, hotel services also began to rise in price by 4.1% (following a  3.8% decline in 2024).

December's consumer market inflation of 1.2% was accompanied by a  0.1% revaluation of the dram against the dollar (compared to 1%  inflation and a 1.9% devaluation of the dram against the dollar in  December 2024). In January-December 2025, consumer market inflation  of 3.3% was accompanied by a 3.8% revaluation of the dram against the  dollar (compared to 1.5% inflation and a 2% revaluation of the dram  against the dollar in January-December 2024). In December 2025, the  dram strengthened against the dollar to AMD 381.5/$1  from AMD  396.5/$1 in December 2024.

It's worth noting that the Central Bank of Armenia's updated December  forecast for 2025 inflation was expected to be 3.6%, a figure that  differed only slightly from the actual recorded rate of 3.3%. For  2026 and 2027, the Central Bank forecasts inflation in the ranges of  3.8-2.6% or 3.3-2.8%, respectively (under Case A or Case B).  Moreover, according to the Central Bank's new forecast, inflation in  the non-exportable goods segment, characterized by rigid prices,  after declining to 2.2% in 2025 (from 2.6% in 2024), will reach  3.5-2.2% or 4-2.5% in 2026 and 2027, according to Case A or Case B.

Recall, in its December forecast report, the Central Bank of Armenia  predicted inflation of 2.1% (Case A) and 1.6% (Case B) for 2024,  against a deflationary 0.6% in 2023. However, according to this  forecast, inflation will rise to 3.9% (Case A) or 3.2% (Case B) in  2025. Moreover, according to the Central Bank's expectations,  inflation in the non-tradable goods segment, characterized by rigid  prices, will decline to 2.6% in 2024 (from 4.8% in 2023), after which  it will increase to 4-2.8% in 2025. The International Monetary Fund  forecasts inflation in Armenia to gradually approach the target  threshold (3%, +/- 1 percentage point - Ed.).

It should be noted that starting in 2025, the inflation target in  Armenia is set at 3% with a tolerance range of +/- 1 percentage  point, compared to the previous 4% (+/- 1.5 percentage points). The  Law "On the State Budget of Armenia for 2025" already stipulated that  the Central Bank should be guided by a new inflation target of 3%  (+/- 1 percentage point) when making monetary policy decisions.