According to the latest Macroeconomic Review by the Eurasian Development Bank (EDB), Armenia's monetary policy in 2025 is expected to stimulate domestic demand, with the average annual exchange rate of the dram projected at 402 drams per US dollar.
As inflation returns to the target range and domestic demand gradually strengthens, interbank lending rates are forecast to align with the refinancing rate, averaging 7% for 2025. In 2026–2027, the rate is expected to decrease to 6.5%, reflecting stable inflation within the Central Bank's target range.
EDB experts anticipate a moderate depreciation of the Armenian dram in 2025 due to declining money market rates and slower economic growth. However, the dram will be supported by a recovery in net remittance inflows and sustained tourism activity. The average annual exchange rate is projected to be around 406 drams per dollar in 2026–2027.
On the fiscal front, Armenia's budget policy is expected to remain expansionary in 2025. The government plans to widen the budget deficit to 5.5% of GDP, up from 4.8% in 2024. This will be driven by an increase in expenditures to 31.5% of GDP, while revenues are projected to rise to 26% of GDP.
Particular emphasis will be placed on capital expenditures, which are planned to increase to 6.6% of GDP in 2025 and 7.1% in 2026. This is expected to positively impact the country’s potential economic growth over the medium term.
