Central Bank of Armenia updates outlook: GDP growth to remain strong, but slow down in 2027

The Central Bank of Armenia expects the economy to maintain growth in the coming years, while gradually slowing down. This outlook is presented in the regulator’s March monetary policy report.

Key projections

According to the CBA:

1. GDP growth in 2026: 4.7-7.1%
2. Slowing to 5.3-5.7% in 2027

Nominal GDP is expected to increase:

1. 2025: AMD 11.3 trillion
2. 2026: AMD 12.2-12.6 trillion
3. 2027: AMD 13.3-13.8 trillion

Two economic scenarios

The CBA outlines two scenarios:

Case A (tight policy)

1. Higher interest rates
2. Inflation risks remain elevated
3. Strong demand with limited supply

Case B (looser policy)

1. Lower interest rates
2. Lower inflation environment
3. Moderate demand and increasing supply

The key difference lies in how aggressively the central bank controls inflation via interest rates.

Inflation outlook

Inflation is expected to remain near target:

1. 2025: 3.3%
2. 2026: 3.3-4.4%
3. 2027: 3.1-3.5%

Target level: 3% ±1 percentage point

Why it matters

1. Armenia’s economy remains on a growth trajectory
2. However, a gradual slowdown is expected
3. The main driver is the balance between inflation and interest rates