ArmInfo. S&P Global Ratings forecasts Armenia's real GDP to expand by 5.3% in 2026 and to 4.8% in 2027, after which the rate will increase to 5% in 2028.
Armenia's absolute GDP will increase from 12.1 trillion drams ($31.2 billion) to 14.2 trillion drams ($35.4 billion) in 2026-2028. GDP per capita will increase from $10,100 to $11,500 over the projected three years, according to a report from S&P Global Ratings, which also includes a forecast for the GDP deflator: a decline in 2026 to 103.1% (from 103. 6% in 2025), followed by a recovery to 103.6% in 2027, and then a further decline to 103.3% in 2028. S&P notes that Armenia's average economic growth rate from 2022 to 2025 was 7.8%-one of the highest growth rates among the 143 countries assessed by the agency. Weaker growth in the medium term reflects S&P's expectation that growth factors related to re-exports from Russia and the influx of labor and capital will continue to slow. S&P expects growth to remain primarily driven by consumption and private investment, supported by robust labor market conditions, improving real incomes amid slowing inflation, and favorable credit conditions, as well as continued investment in construction and services.
S&P forecasts export growth to improve in 2026 to 2.2% (from a 26% decline estimated for 2025), gradually accelerating to 3.7% in 2027 and 4.4% in 2028. The share of exports in GDP will continue to decline to 48% in 2026 (from 50.2% estimated for 2025 and an actual 73.6% in 2024), and then to 46.6% in 2027 and 45.6% in 2028. Real investment growth, according to the S&P forecast, will slow down in 2026 to 13% (from 15.5% estimated for 2025), continuing to decline at a rate of up to 10% in 2027 and up to 9% in 2028. The share of investment in GDP will increase in 2026 to 26.5% (from 25.5% estimated for 2025), and will further increase in 2027-2028 to 27.2-27.9%. The share of net foreign direct investment in GDP will increase in 2026 to 1.8% (from 0.9% in 2025), maintaining this level in 2027 and slightly increasing in 2028 to 1.9%. The unemployment rate, according to S&P, will decline to 11.2% in 2026 (from 11.6% in 2025), continuing this trend to 10.9% in 2027 and 10.6% in 2028.
The current account deficit to GDP ratio, according to S&P, will decline in 2026 to 5.4% (from 6.4% in 2025), continuing to decline further in 2027-2028 to 5.1-4.8%. According to S&P, the government debt-to- GDP ratio will increase to 47.7% in 2026 (after declining from 48% to 46.5% in 2025), and then continue to rise to 48.2-48.4% in 2027-2028. S&P forecasts inflation in Armenia at 3.2% in 2026 (compared to 3.4% in 2025), with a further decline to 3% in 2027 and then an increase to 3.3% in 2028 (i.e., it will remain at the target level of 3% during this period, with an acceptable range of deviations of +/- 1 percentage point - Ed.).
According to S&P forecasts, the dram will weaken against the US dollar by the end of 2026 to AMD 384 $1 (from AMD 381.36/$1 at the end of 2025), and then continue to depreciate to AMD 392 /$1 by the end of 2027 and to AMD 40/$1 by the end of 2028. The share of foreign currency in funds placed by banks will increase to 38% in 2026 (from 31.5% in 2025) and remain at this level in 2027-2028. The share of foreign currency in funds attracted by banks, specifically in deposits, will also increase in 2026 to 42% (from 33.6% in 2025) and remain at this level in 2027-2028.
It should be noted that the Central Bank of Armenia, in its December forecast, predicted GDP growth of 6.3-4.1% for 2026 and 4.9-5.3% in 2027. In 2025, according to the Central Bank's estimates, GDP growth was expected to remain at 5.9% (similar to the actual 5.9% growth in 2024). According to the Central Bank's updated forecast, export and import dynamics in 2025 were expected to be negative, with exports predicted to decrease to 37.3-36.1% and imports by 32.7-32.5%. However, already in 2026, the Central Bank forecasts an improvement in the dynamics of both exports (4.5-3.4%) and imports (3.1%), with this trend continuing in 2027 to 3.9-4.1% (for exports) and 4.2-3.8% (for imports).
According to the IMF forecast updated in December, Armenia's GDP growth will be 5% and 5.5% in 2025 and 2026, respectively. Regarding Armenia's foreign trade, according to the IMF forecast, a decline of 31.1% in exports and 28.1% in imports was expected in 2025, with a return to almost identical growth of 2.2-2.1% in 2026 and a further moderate acceleration in growth rates to 3.4-3.7% in 2027. In its January forecast, the World Bank (WB) predicts a slowdown in Armenia's GDP growth in 2026-2027 to 4.9-4.7% from an estimated 5.2% in 2025. Fitch Ratings, in its January forecast update, expects sustainable economic growth prospects for Armenia - above 5% in 2026-2027.
Armenia's draft state budget for 2025 projected a GDP growth of 5.1%, while the 2026 state budget projects 5.4% economic growth. According to the Statistical Committee of the Republic of Armenia, the country's GDP growth, after accelerating from 5.8% to 12.6% in 2022, began to slow in 2023 to 8.3% and further to 5.9% in 2024. Growth then accelerated again to 7.2% in 2025, reaching AMD 11.318 trillion (over $29.2 billion) in absolute terms. The GDP deflator index also grew from 106.9% to 108% in 2022, followed by a decline to 103.1% in 2023 and to 101.4% in 2024, before rising to 103.6% in 2025. (The average exchange rate of the dram against the US dollar for January-December 2025 was AMD 387.0/$1).
