Armenia approves 2026 state budget with nearly 16% cut in defence spending

The Armenian Cabinet has approved the draft state budget bill for 2026, with nearly 16% reduction in defence spending.

According to the bill, the defence spending is set to drop to 560 billion drams ($1.46 billion) from the 20% increase to 664 billion drams ($1.73 billion) seen in 2025, Caliber.Az reports per Armenian media.

The planned 2026 defence budget aims to maintain combat readiness, ensure the strategic deployment of the armed forces, and safeguard the country’s borders from external threats.

Finance Minister Vahe Hovhannisyan emphasised that the overall budget aligns with government priorities and includes substantial investments in social programs, education, healthcare, economic development, and infrastructure.

Economic growth is forecasted at 5.4%, and the budget deficit is expected to narrow to 4.5% of GDP, down from 5.5% this year.

Among the budget’s key initiatives are the launch of a universal healthcare insurance system, the development of the Academic City project with an allocation of 4.9 billion drams ($12.8 million) for construction and consulting services, salary increases, and the renovation and re-equipment of kindergartens and schools. 

The draft budget will now proceed to parliamentary consideration in the coming weeks.

By Sabina Mammadli