The Eurasian Development Bank (EDB) has raised its forecast for Armenia’s economic growth in 2026 to 6%, according to the bank’s macroeconomic outlook for 2026–2028.
According to the report, Armenia’s economy maintained strong growth momentum at the beginning of 2026. The economic activity index increased by 6.9% in January–April, supported by stable domestic demand, Sputnik Armenia reported.
One of the main growth drivers was the rapid pace of household lending. In April, the volume of loans was 15% higher than in the same period a year earlier. Another supporting factor was a 17.3% increase in remittances transferred to households during January–April. The services sector, which expanded by 7.6%, and construction, which grew by 22.9%, were the main engines of economic growth. Additional support came from accelerating industrial output, which rose 13% during the same period.
“We forecast Armenia’s GDP to grow by 6% in 2026 and stabilize at 5.5% in 2027–2028. Several factors will contribute to this. Strong domestic demand will continue to support economic growth. Household consumption will make the largest contribution to GDP expansion against the backdrop of active lending and high savings levels. Investment activity will also remain one of the key growth factors,” the report states.
The EDB noted that investment in fixed capital increased by 7.2% in the first quarter of 2026, while remaining close to record levels. In 2025, such investment amounted to 21% of GDP, compared with the average of 19% over the past decade. The bank assessed that capital inflows into Armenia continued to grow due to lower risk premiums and improvements in sovereign credit ratings.
Public investment also contributed to expanding the economy’s growth potential. According to the bank, maintaining capital expenditures at 5.7% of GDP in 2026–2028 will improve overall economic productivity.
In addition, the EDB expects the recovery of economic activity in Russia to have a positive impact on external demand, supporting export revenues and remittance inflows to Armenia.
Armenia’s foreign trade deficit reached $1.6 billion in January–April 2026, compared with $1.5 billion during the same period a year earlier. Imports increased by 2.5%, while exports declined by 3.3%.
Inflation exceeded the target range of the Central Bank of Armenia (3±1%). Annual inflation reached 5.3% in April, compared with 4.5% in February and 4.2% in March. Rising food prices were identified as the main factor behind inflation.
The EDB warned that high oil prices and ongoing geopolitical risks could create additional inflationary pressure. An average Brent crude price of more than $80 per barrel, as well as possible disruptions in global supply chains, could increase business costs.
The bank listed accelerating inflation and weakening external demand among the main risks facing Armenia’s economy. Continued conflict in the Middle East could disrupt regional supply chains and intensify inflationary pressures. Elevated geopolitical tensions also contribute to keeping oil prices high.
Additional risks include rising global prices for food, energy resources and logistics services, which could increase imported inflation and raise costs in manufacturing, foreign trade and transportation sectors.
At the same time, the risk of slower Armenian exports remains due to potential economic deterioration in Middle Eastern countries, which are important trading partners for Armenia. A decline in global oil prices compared with the baseline scenario could also create risks for the economy. The main channel of impact could be weaker Russian demand for Armenian products. However, lower energy prices could reduce production and transportation costs.
The report noted that at the end of 2025, the EDB had forecast Armenia’s GDP growth for 2026 at 5.3%.
The EDB is an international financial institution engaged in investment activities across the Eurasian region. Its members are Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan, which recently joined the bank.
