Armenia greenlights $9.4 billion budget for 2026 with lower deficit

On December 4, 2025, the Armenian Parliament approved the 2026 state budget, with 62 deputies voting in favour, 27 against, and 3 abstaining.

Armenian media outlets, cited by Caliber.Az, reported that according to the approved plan, budget revenues are expected to rise by 8.9% compared to the 2025 plan, reaching 3.091 trillion drams (just over $8 billion), while expenditures will increase by 5.4%, totalling 3.628 trillion drams ($9.4 billion).

Economic growth is projected at 5.4%, bringing GDP to 11.933 trillion drams (approximately $31 billion). The state budget deficit is estimated at 536 billion drams (just under $1.4 billion), representing 4.5% of GDP, down from 5.5% in 2024 (2025 figures are not yet finalised).

Government debt is expected to rise to 52.9% of GDP by the end of 2026, up from 50.7%, totalling around $16.5 billion. Tax revenues will account for 2.971 trillion drams (about $7.7 billion), with the tax-to-GDP ratio increasing by 0.4 percentage points.

On the expenditure side, current spending — including salaries, pensions, and state healthcare contracts — will total 2.924 trillion drams ($7.6 billion), while capital spending on infrastructure such as roads, schools, and other projects will reach 704 billion drams ($1.8 billion). The share of capital spending in GDP will decline from 6.6% to 5.9%, reflecting underperformance in previous years.

Defence spending will be reduced by 15.3%, falling to 563.1 billion drams (approximately $1.463 billion), accounting for 15.5% of total expenditures. In absolute terms, this represents a decrease of 101.5 billion drams (around $264 million).

By Tamilla Hasanova