Armenia’s national debt reaches $14.5 billion

Armenia’s national debt stood at $14.5 billion at the end of December 2025, according to data published by the country’s Ministry of Finance.

The figure includes both external and domestic obligations and represents a 13.1% increase, or about $1.7 billion, compared with the end of 2024, Caliber.Az reports, citing Armenian media. 

For the first time, domestic debt has surpassed external debt.

At the end of 2025, Armenia’s domestic debt totaled $7.5 billion, up $1.1 billion, or 17.3%, from the beginning of the year. In local currency terms, domestic debt amounted to approximately 2.9 trillion Armenian drams.

The Ministry of Finance noted that the rise in total public debt during 2025 was primarily driven by increased domestic borrowing, largely in the form of government treasury bonds purchased by residents. Domestic debt is denominated and serviced in Armenian drams, reducing foreign exchange risk but increasing pressure on the local financial market.

Armenia’s external debt rose by 9%, or roughly $600 million, reaching $7 billion by the end of 2025. External obligations include loans from international financial institutions and foreign governments, as well as Eurobonds purchased by non-residents. A smaller portion consists of Armenian treasury bonds held by foreign investors.

Debt servicing pressures were particularly high in 2025. To refinance existing obligations, the government issued $750 million in Eurobonds on international capital markets in March. The proceeds were used primarily to repay earlier debts and were added to the country’s external debt stock.

The Ministry of Finance has also released its 2026 annual borrowing programme. According to the plan, Armenia’s state budget deficit is projected at approximately 537 billion drams ($1.4 billion). The government intends to finance 210 billion drams ($550 million) from domestic sources and 327 billion drams ($860 million) from external borrowing. 

Under current projections, Armenia’s government debt-to-GDP ratio is expected to stand at 49.5% at the end of 2025 and rise to 52.9% by the end of 2026, an increase of 3.3 percentage points.

Armenia’s public debt consists predominantly of government debt, with only a small share attributable to the Central Bank.

While the debt-to-GDP ratio remains within the limits set by fiscal rules and is considered manageable, the cost of servicing and repaying debt places a significant strain on the state budget.

In 2026, Armenia is expected to allocate approximately 1.05 trillion drams ($2.7 billion) for public debt repayment and servicing. Of this amount, around 420 billion drams ($1.1 billion) will be used for interest payments, accounting for more than 11% of total budget expenditures.

By Sabina Mammadli