The Eurasian Development Bank (EDB) forecasts that the Central Bank of Armenia will conclude its key rate-cutting cycle in the first half of 2025. According to the bank’s macroeconomic outlook, the average interbank lending rate is expected to stabilize at 7% annually.
EDB analysts anticipate that monetary policy will remain stimulative throughout 2025. By 2026–2027, the rate is projected to settle near 6.5%, aligning with the Central Bank’s inflation target range and sustainable GDP growth.
In the foreign exchange market, experts predict moderate depreciation of the Armenian dram. The average annual exchange rate for the dram is expected to reach 402 AMD per US dollar in 2025, potentially softening to 406 AMD by 2026–2027.
The currency's trajectory will be influenced by lower money market rates, slower economic growth, and increased imports driven by stronger domestic demand. However, the dram will be supported by recovering remittance inflows and robust tourism activity.
Regarding fiscal policy, the EDB highlights its expansionary nature in 2025. The budget deficit is projected to widen to 5.5% of GDP from 4.8% in 2024.
Government spending is expected to rise to 31.5% of GDP, with particular emphasis on capital investments, which are forecast to reach 6.6% of GDP in 2025 and 7.1% in 2026. According to the bank’s experts, such a policy could positively impact the economy’s growth potential over the medium term.
