ArmInfo. The Central Bank of Armenia (CBA) has lowered its 2026 outlook, anticipating a more pronounced deceleration in GDP growth to 4.1–4.5% (compared to the previously projected 4.7–7.1% growth and the actual growth of 7.1% in 2025). Growth rates in 2027 are expected to shift marginally to 3.7–4.7% (down from the previously projected 5.3–5.7%).
Concurrently, the Central Bank downgraded its foreign trade forecast, now projecting a contraction in exports and imports for 2026–2027 (reversing its previous forecast of a 2% growth). Consequently, the absolute value of GDP is set to decline in 2026 to AMD 10.9 trillion (down from the actual AMD 11.3 trillion recorded in 2025), before rising to AMD 11.7–11.8 trillion in 2027. These figures were highlighted in the recently published June report by the CBA, titled "Monetary Policy Program for Q2 2026".
According to the CBA’s updated forecast, inflation in 2026 is projected to hover within the 3.9–4.1% range (compared to the previously estimated 3.3–4.4% and the actual inflation rate of 3.3% in 2025), against a target threshold of 3% (+/- 1 percentage point). For 2027, inflation is forecast at 2.9–3.6% (compared to the earlier projection of 3.1–3.5%). Notably, under the new forecast, inflation in the non-tradable goods sector—characterized by sticky prices—will rise more conspicuously in 2026 to 3.4–3.5% (up from 2.2% in 2025), exceeding the previously projected 3.0–3.3%. It will then see an imperceptible retreat to 2.7–3.5% in 2027 (against the prior forecast of 3.3–4.1%).
Export and Import Dynamics, Current Account, and Remittances
Following an accelerated downturn of 29.5–32.7% in 2025 (down from 3.2–11.0% in 2024), export and import dynamics will remain entrenched in a slump through 2026. However, the contraction pace is expected to decelerate to 5.1–5.9% for exports and 4.2–5.8% for imports. This stands in contrast to the earlier forecast, which had anticipated a recovery in growth, projecting exports to rebound to 25.5–28.5% and imports to 34.9–36.7%. The Central Bank now expects a resumption of foreign trade growth only in 2027, forecasting export growth of 2.6–4.3% and import growth of 0.8–1.1%, whereas the previous forecast had merely predicted a moderation of double-digit growth to 16–19% for exports and 11–14.3% for imports.
The current account deficit-to-GDP ratio, according to the CBA’s new forecast, will decrease to 5.7–6.5% in 2026 (following an actual spike from 4.6% to 7.2% in 2025). This updated range differs only slightly from the previous projection of 5.4–6.4%. The downward trend for this indicator is set to persist into 2027, declining to negative values of 4.3–5.5% (compared to the previously projected 4.9–6.1%).
The remittances-to-GDP ratio, based on the CBA’s updated outlook, will rise to 2.8–2.9% in 2026 (following an actual drop from 3.1% to 0.5% in 2025). A nearly identical level of 2.9–3.0% is expected for 2027. Nevertheless, this indicates a weak economic effect regarding the overall impact of transfer payments on the domestic economy.
Fiscal Projections and Global Economic Context
Regarding fiscal revenues and expenditures, the Central Bank’s 2026 forecast is outlined as follows: expenditures will expand more noticeably—rising from AMD 2.6 trillion to AMD 3.5 trillion—outpacing revenues, which are projected to grow from AMD 2.9 trillion to AMD 3.1 trillion. As a result, the state budget deficit will widen from AMD 419.3 billion to AMD 540.4 billion. Consequently, in 2026, the state budget deficit-to-GDP ratio will escalate from 3.7% to 4.9–5.0%. This is driven by a less pronounced increase in the revenue share of GDP (growing from 25.5% to 28.3–28.4%) relative to the expansion of the expenditure share of GDP (surging from 23.1% up to 32.2–32.3%). In 2027, revenues are forecast to reach AMD 3.3 trillion and expenditures AMD 3.8 trillion, which will narrow the deficit to AMD 447 billion. The state budget deficit-to-GDP ratio will subsequently drop to 3.8% in 2027, accompanied by a minor contraction of the revenue-to-GDP share to 28.0–28.2% and the expenditure-to-GDP share to 31.7–32.0%.
This CBA report also features updated forecasts for macroeconomic developments and inflation trajectories in the US, the Eurozone, and the Russian Federation, alongside global price trends for crude oil, copper, and the FAO Food Price Index.
Benchmarking Against International Forecasts
It is worth noting that the World Bank (WB), in its June forecast, maintained its expectations for Armenia's GDP growth for 2026 and 2027, predicting a slowdown to 5.3% and 5.1%, respectively. The International Monetary Fund (IMF), which also refreshed its outlook in June, left its 2026–2027 growth projections for Armenia unchanged, forecasting a deceleration to 5.3% and 5.5%, respectively. The European Bank for Reconstruction and Development (EBRD), updating its outlook in early June, anticipates a flat 5.5% GDP growth for Armenia in both 2026 and 2027. Fitch Ratings, in its updated January outlook, projects a stable growth path for the Armenian economy, remaining above 5% through 2026–2027. S&P Global Ratings, in its February update, signaled a moderation in Armenia's GDP growth to 5.3% in 2026 and further to 4.8% in 2027, before accelerating slightly to 5% in 2028. The Asian Development Bank (ADB), in its April forecast, slated Armenia's 2026 GDP growth at 5.5%, with an acceleration to 5.7% in 2027. Meanwhile, Armenia's draft state budget targets a 5.4% GDP growth for 2026, equivalent to AMD 11.9 trillion (over $32.2 billion).
Concurrently, according to the IMF's earlier December outlook, Armenia's GDP growth was pegged at 5.5% for 2026. On foreign trade, the IMF predicted that both exports and imports would achieve nearly identical growth rates of 2.1–2.2% in 2026, followed by a moderate acceleration to 3.4–3.7% in 2027. The World Bank's January report foresaw Armenia's GDP growth slowing to 4.7–4.9% across 2026–2027. Fitch Ratings' January update aligned with its long-term expectation of a resilient outlook above 5% for 2026–2027. S&P Global Ratings' February report reiterated the 5.3% (2026) and 4.8% (2027) targets before a 5% rebound in 2028. Additionally, S&P forecasts an improvement in export dynamics for 2026, pulling out of a slump into a 2.2% expansion, with momentum building up to 3.7% in 2027 and 4.4% in 2028.
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 moderating to 8.3% in 2023 and further to 5.9% in 2024. Growth then re-accelerated to 7.2% in 2025, reaching AMD 11.318 trillion in absolute terms (over $29.2 billion). The GDP deflator index, following a surge from 106.9% to 108.0% in 2022, started to decrease to 103.1% in 2023 and 101.4% in 2024, before recovering to 103.6% in 2025. (The average exchange rate of the Armenian Dram to the US Dollar for January–December 2025 stood at 387.01 AMD/$1).
