The IMF Executive Board has approved a new 36-month Stand-By Arrangement for Armenia totaling SDR 128.8 million, about $175 million, after concluding the 2025 Article IV consultation and canceling the previous SBA, according to an IMF press release. The decision makes SDR 18.4 million, about $25 million, immediately available, with the remainder to be released in six semiannual tranches. The IMF said Armenian authorities intend to treat the new arrangement as precautionary and have agreed to publish the IMF Staff Report.
According to the IMF, Armenia has successfully navigated multiple challenges in recent years while preserving macroeconomic and financial stability. The Fund also stated that performance under the previous Stand-By Arrangement was strong and that the new program will support continuity in reforms, preserve macroeconomic stability, and provide insurance against external risks.
According to the IMF, Armenia’s economic performance has remained strong despite global uncertainty. Real GDP grew on average by 8.9 percent annually in the past three years due to agile policies and unforeseen inflows of labor and capital. Growth is expected to remain solid, reaching about 5 percent in 2025 and 5.5 percent in 2026. The IMF noted that the outlook is positive, with steady growth and inflation converging toward the Central Bank of Armenia’s 3 percent target. Continued implementation of prudent policies and acceleration of reforms will be important to strengthen resilience and secure inclusive and sustainable growth.
Executive Directors commended Armenia’s strong program ownership and sound policies, which they said have contributed to macroeconomic and financial stability. Directors welcomed the authorities’ 2026 draft budget and medium-term fiscal targets. The authorities’ 2026 budget and the medium-term fiscal consolidation plan are assessed as appropriate. The planned fiscal stance in 2026 is mildly contractionary while accommodating spending on refugee support, health, and public investment. Over the medium term, further deficit reduction and the creation of fiscal space for priority social and capital spending will depend on additional revenue mobilization through broadening the tax base, revenue administration measures, and fiscal structural reforms to raise spending efficiency.
The Central Bank of Armenia remains a central player in maintaining stability. Its updated monetary policy framework is centered on prudent risk management and transparency, supporting the return of inflation to the 3 percent target. A data-driven approach to policy rates, along with the flexible exchange rate and healthy reserve buffers, continues to protect the economy from external shocks.
Armenia’s banking system is assessed as well-capitalized, liquid, and broadly resilient. Mortgage growth has receded somewhat, although strong credit growth, including loans to the construction sector and consumers, requires vigilance. The Central Bank’s monitoring and readiness to deploy macroprudential tools will help mitigate risks. Strengthening supervisory frameworks, expanding the macroprudential toolkit, and advancing stablecoin regulation remain priorities to safeguard financial stability.
Broader structural reforms aimed at raising labor force participation, increasing employment, supporting export diversification, improving the investment climate, strengthening governance, and enhancing statistical reporting will support long-term sustainable and inclusive growth. Executive Directors agreed that accelerating structural reforms will support sustainable and inclusive growth.
