The Eurasian Fund for Stabilisation and Development (EFSD) has reported a significant slowdown in Armenia's economic growth. According to the EFSD baseline projections, economic growth is expected to stabilise at around 5% between 2025 and 2027, close to Armenia's potential growth rate.

The fund cited a decline in re-export volumes and reduced tourist inflows from Russia — both factors linked to Western sanctions on Moscow since the invasion of Ukraine. 

The report highlights external risks, including a sharper decline in precious metals trade and lower tourist arrivals, which could lead to a near-term economic contraction and pose fiscal and balance of payments challenges. Additional fiscal pressures stem from the government's social obligations towards Nagorno-Karabakh refugees.

Inflation stood at 1.5% in 2024, well below the central bank's target range of 4.0 ± 1.5%. At the same time, a deteriorating services balance contributed to a higher current account deficit, while the Armenian dram remained overvalued.

Monetary policy will focus on bringing inflation back to target, while increased government spending will widen the budget deficit, requiring additional sources of financing.

Armenia's 2025 state budget projects economic growth of 5.1%. The central bank estimates GDP growth between 4.8% and 7.1% in 2025, between 4.7% and 7% in 2026 and between 5% and 6.2% in 2027. Independent financial institutions have also provided forecasts, with the Eurasian Development Bank (EDB) predicting 5.5% growth, the World Bank 5%, the International Monetary Fund 4.9%, the European Bank for Reconstruction and Development (EBRD) 4.8%, the Asian Development Bank (ADB) 6%, Fitch Ratings 4.9% and S&P Global Ratings around 5.5%.

Established in 2009 by Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan, the EFSD manages over $9bn in capital. Its main objectives are to ensure the economic and financial stability of its member states and to support sustainable development initiatives.