Armenia is expected to see sustained economic growth and a gradual decline in inflation over the next three years, according to the latest macroeconomic report published by the Eurasian Development Bank (EDB).
The EDB projects that Armenia’s GDP will grow by 5.5% in 2025, followed by 5.3% in 2026 and 5.0% in 2027. These forecasts exceed the Armenian government’s official projection of 5.1% economic growth in 2025, as outlined in the state budget.
According to the EDB, the 5.5% growth in 2025 will be driven by strong domestic demand, bolstered by increased government spending, growth in consumer lending, and a stable flow of remittances. The report also notes the stimulating effect of expansionary fiscal policy on economic activity.
The Central Bank of Armenia shares a similarly optimistic outlook. In its first-quarter monetary policy report, it revised its view of Armenia’s long-term growth potential upward, considering a 5% annual growth rate as the new norm—up from the previous 4–4.5%. The Central Bank estimates GDP growth within a range of 4.8% to 7% in 2025, 4.1% to 4.7% in 2026, and 4.7% to 6.1% in 2027.
Other international financial institutions offer a more mixed picture:
- World Bank: 4% GDP growth in 2025
- International Monetary Fund (IMF): 4.5%
- European Bank for Reconstruction and Development (EBRD): 5%
- Asian Development Bank (ADB): 6%
- Fitch Ratings: 4.9%
- United Nations: 5.2%
In parallel with economic expansion, the EDB forecasts a steady decline in inflation, predicting rates of 3.1% in 2025, 3.0% in 2026, and 2.5% in 2027—comfortably within the Central Bank’s inflation target of 3% ±1%.
The Central Bank itself estimates a more conservative inflation range of 2.6% to 2.4% by the end of 2025, slightly rising to 2.9%–3.1% in 2026, and stabilizing at around 3% in 2027.
The World Bank anticipates inflation at 3.5% in 2025 and 4% in 2026.
The IMF projects 3.3% in 2025 and 3.0% in 2026.
The ADB remains more optimistic, with a 2.5% forecast for 2025.
According to the EDB, inflationary pressures have remained historically low, dipping to near-zero or even negative levels in 2023 and early 2024. However, recent months have seen a slight upward trend, attributed to rising global food prices and domestic monetary easing. Inflation is expected to stabilize near 3% in the medium term.
The Armenian dram is forecast to depreciate moderately against the U.S. dollar, with average exchange rates projected at around 392 AMD/USD in 2025 and between 402–403 AMD/USD in 2026–2027. This reflects a gradual decline in the attractiveness of dram-denominated assets due to ongoing interest rate cuts and a steady increase in imports amid stable domestic demand.
