News - World Bank Raises Armenia's Growth Forecasts for 2025 and 2026

In its latest Global Economic Prospects report, the World Bank has updated its projections for Armenia's economic growth, anticipating a rise of 5.2% in 2025, followed by 4.9% in 2026, and 4.7% in 2027. This revision marks an upward shift from its previous forecasts in June, which estimated a 4% growth for 2025 and 4.2% for 2026, resulting in enhancements of 1.2 and 0.7 percentage points, respectively. Analysts point out that the broader South Caucasus region is expected to experience a slight deceleration, with growth slowing to 3.3% in 2026 and 3.1% in 2027. Within this context, Armenia and Georgia are projected to face a moderation in private consumption as economic activity levels stabilize from previously high base points. Respective challenges like reduced remittances and declining export revenues are anticipated to exert pressure on current accounts. A provisional peace agreement reached between Armenia and Azerbaijan in August 2025 may bolster regional stability and deepen integration, though potential setbacks in the peace process remain a risk to sustained growth. Meanwhile, the Armenian government's budget forecasts an economic expansion of 5.1% for 2025 and 5.4% for 2026. Various international financial organizations have also issued their growth predictions for Armenia: the Eurasian Development Bank expects 6% in 2025 and 5.3% in 2026, while the IMF estimates growth of 5% and 5.5% for the respective years. The European Bank for Reconstruction and Development foresees a 6% growth in 2025 and 4.5% in 2026, aligning with the Asian Development Bank's 2025 forecast of 6%. As these forecasts align with anticipations for the broader regional developments, all eyes remain on whether geopolitical factors will favorably influence economic conditions in Armenia and its neighbors.