Economic Monitor Armenia
The Armenian economy grew by a substantial 7.2 per cent in 2025 compared with the previous year, with consumption and investment being the main drivers. For 2026, the IMF forecasts robust growth of 5.3 per cent. Overall, the impact of the conflict with Iran remains limited; the fixed-price gas contract cushions much of the energy price shock. However, a further rise in inflation could dampen growth.
WA 15 | June 2026
Macroeconomic Analyses and Forecasting
Overview
- 2025: strong growth of 7.2% yoy, driven primarily by consumption and investment
- 2026: growth slows to 5.3% yoy(IMF forecast). Consumption on the demand side and services (particularly ICT) on the supply side remain the main drivers
- Iran conflict: the IMF has revised its GDP forecast for 2026 downwards slightly by -0.2 pp
-The main impact stems from higher energy prices and the associated rise in inflation
-The effect is significantly mitigated as ARM imports gas from RUS at a fixed price - Inflation: heavy reliance on food prices, which have risen slightly. The IMF’s forecast for 2026 has been raised to 3.6% yoy(+0.6 pp). No change to the key interest rate so far (6.5% p.a.)
- The dram appreciated slightly in 2026; FX reserves at an all-time high of USD 5.9 bn (May 2026)
- Current account: Sharp increase in 2025 to -6.7% of GDP. IMF forecast for 2026 at -6.0% of GDP (-1.5 pp). However, this adjustment is not primarily due to the Iran conflict
- Trade in goods largely unaffected by the Iran conflict. The energy price shock will lead to higher import costs. Slowdown in exports due to the Russian import ban on foodstuffs
- Both the budget deficit and public debt are rising. No direct impact from the Iran conflict
- Overall, the impact of the Iran conflict on the Armenian economy is limited
- A fixed-price gas contract cushions the energy price shock. A deterioration in relations with Russia remains one of the main risk factors
