The World Bank has published the monthly summary of Armenia’s economic development.
· Economic activity moderated to 7.2 percent (yoy) in February, with high growth in industry and construction.
· Inflation grew further to 4.5 percent in March, mostly driven by food prices.
· In February, both exports and imports registered double-digit growth following contractions at the start of the year.
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· Net non-commercial money transfers expanded modestly by 5.2 percent (yoy).
· A budget deficit equivalent to 0.2 percent of projected annual GDP was recorded in February, however the two-month cumulative balance still shows a surplus.
Economic activity in February moderated to 7.2 percent (yoy) from 7.6 percent (yoy) in January. Growth remained strong, supported by robust double-digit expansion in industry (23.8 percent, yoy) and construction (21.8 percent, yoy). Within industry, mining and manufacturing grew 67 percent (yoy) and 23.8 percent (yoy), respectively, whereas electricity and energy contracted 4.5 percent (yoy). The sharp increase in mining largely reflects a low base effect, following a contraction in mining activities in the first two months of last year. Growth in non-trade services and trade stood at 7 and 5.6 percent (yoy), respectively. The number of registered businesses grew robustly by 21.6 percent (yoy) in February, driven mainly by a 31.1 percent rise in LLCs.
In March, inflation rose to 4.5 percent (yoy) from 4.3 percent (yoy) in February. The largest contribution continued to come from food and non-alcoholic beverages, where inflation increased 7.8 percent (yoy) and contributed about 68 percent of overall inflation. Health inflation was the second highest, rising 4.5 percent (yoy) and contributing 10.2 percent. Transport prices showed modest inflation in March (2.1 percent). At its March 17, 2026 meeting, the Board of the Central Bank of Armenia decided to keep the policy rate unchanged at 6.5 percent.
In February, exports and imports rose 37.6 percent (yoy) and 26.9 percent (yoy), respectively, following contractions in January. Exports expanded by 37.6 percent (yoy) mostly due to a surge in exports of minerals, which more than tripled (yoy) – with higher metal prices explaining two thirds of the increase – coupled with a 49 percent (yoy) rise in exports of precious and semi-precious stones. Additional gains were recorded in ready-food products (19 percent), while exports of vegetable products declined (down 32.2 percent). On the other hand, imports expanded 26.9 percent (yoy) mainly due to imports of means of transport (up 75.6 percent, yoy), machinery (up 25.3 percent, yoy), and ready-food products (up 68.3 percent, yoy). Cumulative January-February exports and imports grew 12.6 percent (yoy) and 7.3 percent (yoy), respectively, resulting in no change to the trade deficit (yoy). Exports to Russia rose 5.2 percent (yoy) (35.1 percent of total), while exports to China grew 3.7-fold (13.6 percent of total). Exports to the UAE fell 36.6 percent (yoy) due to a high base from gold re-exports. In the first quarter of 2026, tourist arrivals grew 18.2 percent (yoy), following the 10.6 percent (yoy) decline registered in Q1 2025.
In February, net non-commercial money transfers grew by 5.2 percent (yoy), following a 44 percent (yoy) surge in January. This was driven by a modest 10 percent (yoy) increase in net inflows from Russia (accounting for 57 percent of total net inflows) alongside a 9.6 percent (yoy) rise of inflows from the United States (accounting for 42 percent of total net inflows). Net inflows from other countries fell 74.5 percent (yoy), although they account for only 1.3 percent of the total.
In March, the AMD stayed flat against the USD (mom) while it was appreciated by 2.3 percent (mom) against the EUR. The AMD appreciated 3.9 percent (yoy) against the USD in March, while it depreciated against the EUR and RUB by 2.8 percent (yoy) and 2.4 percent (yoy), respectively. Gross reserves expanded to USD 5.5 billion at end-March, equivalent to 4.1 months of imports.
In February, commercial bank deposits fell 0.2 percent (mom) while credit expanded by 0.9 percent (mom). Exchange rate-adjusted annual growth remained stable, at 17.1 percent (yoy) for total deposits and at 25.3 percent (yoy) for credit. Financial system indicators remained sound: the Capital Adequacy Ratio slightly rose to 20.6 percent, and Non-Performing Loans stabilized at 1.3 percent.
In February, an overall budget deficit equivalent to 0.2 percent of estimated annual GDP was recorded. In February, total revenues and grants grew 12.4 percent (yoy) in nominal terms. Tax revenues increased by 13 percent (yoy), mostly driven by a 10.7 percent (yoy) rise in income tax collections and a 70.8 percent increase in state duty collection. Total expenditure grew 9.5 percent (yoy), driven by the 18.2 percent (yoy) current expenditure increase, while capital expenditures shrunk by 52 percent (yoy), reflecting a 30.9 percent (yoy) decline in capital defense spending from a high base in 2025. Health spending (mostly current) grew 80.8 percent (yoy), following the introduction of public health insurance in 2026. Over the January-February period, an overall budget surplus equivalent to 0.6 percent of estimated annual GDP was registered.
| Figure 1. Economic activity moderated to 7.2 percent in February | Figure 2. Net non-commercial money transfers rose modestly in February (yoy) | ||
| (Armenia Economic Activity Index, yoy change, %) | (USD thousand) | ||
| Source: Statistical Committee of Republic of Armenia | Source: CBA | ||
| Figure 3. Inflation accelerated in March | Figure 4. Total exports grew in February, led by mineral exports | ||
| (CPI inflation, yoy change, %) | (USD billion) | ||
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Source: CBA |
Source: Statistical Committee of Republic of Armenia |
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| Figure 5. Deposit growth edged down, while credit growth rose in February | Figure 6. A surplus equivalent to 0.6 percent of estimated annual GDP was registered in Jan-Feb | ||
| (%, yoy, exchange rate adjusted) | (AMD billion) | ||
| Source: CBA | Source: Ministry of Finance | ||
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