EFSD Projects Armenia’s Economy to Grow by 5.8 Percent this year
Armenia’s economy continues to expand at a robust pace, supported by domestic demand, services, and construction.
According to the preliminary forecasts of the Eurasian Fund for Stabilization and Development (EFSD), gross domestic product (GDP) growth will come in at 5.8 percent in 2026 and 5.1 percent in 2027, before stabilizing at around 5 percent in 2028-2029. Sustaining this growth will depend on stronger productivity and broader export opportunities.
These estimates are among the outcomes of the EFSD’s regular economic monitoring mission to Armenia, held in October 2026. EFSD economists held consultations with officials of government bodies, the Central Bank, and international organizations, as well as with representatives of the expert and business communities.
Domestic demand remains the main driver of growth. At the same time, expanding demand is accompanied by a sizable current account deficit, which increases the economy’s need for external financing. Expanding exports of goods and services is important for making growth more resilient. A declining labor force participation rate, particularly among women, is an additional constraint on growth.
“Armenia maintains a high level of economic activity. For it to translate into sustainable growth in household incomes, it is important to raise productivity, expand employment opportunities, and improve the implementation of investment projects,” said EFSD Mission Chief Natalia Lavrova. “This would strengthen domestic sources of growth and reduce the economy’s vulnerability to external shocks.”
The mission also examined the drivers of consumer price growth. EFSD study found that, in the second quarter of 2026, supply factors contributed more than demand factors to annual inflation in the part of the consumer basket covered by the analysis, although the contribution of demand rose. Inflationary pressure cannot therefore be explained by external price factors alone.
The preliminary mission findings and the medium-term forecasts were presented at briefings for the Ministry of Finance of Armenia and the Central Bank of Armenia on October 6, and for international partners on October 7. Participants also discussed the EFSD study on the contributions of demand and supply factors to inflation.