An International Monetary Fund (IMF) team, led by Alexander Tieman, visited Yerevan from September 17 to 30, 2025, to discuss the sixth review of Armenia’s current Stand-By Arrangement (SBA) and the authorities’ request for a new 36-month SBA. Following the discussions, Tieman stated that a staff-level agreement had been reached on policies for the completion of the sixth review under the existing SBA and for a new 36-month, SDR 128.8 million (approximately US$175 million) SBA. This agreement is subject to approval by the IMF’s Executive Board later in the year.
Tieman noted, “Armenia’s economic activity remains robust, with real GDP growth of 5.6 percent in the first half of the year, driven by buoyant consumption and investment as well as strong tourism arrivals. Employment growth has remained steady, and inflation has temporarily picked up to 3.7 percent y/y in September, driven largely by food and services prices. The current account deficit has remained stable, reflecting strong domestic demand and normalization of goods trade, offset by strong tourism. Prudent execution of the 2025 budget has resulted in a small overall fiscal deficit of 0.4 percent of GDP through June 2025, which was lower than projected on the back of robust tax revenue performance, buoyed by strong economic activity, alongside under-execution in both current and capital expenditures. Central government debt remains moderate at 48 percent of GDP at end 2024. The banking system is highly profitable and features strong capital and liquidity buffers.”
He added that real GDP growth is projected to remain strong, reaching about 5 and 5.5 percent in 2025 and 2026 respectively, and that inflation is expected to remain near the Central Bank of Armenia’s target by the end of 2025. Tieman pointed out that risks to this outlook are mainly related to global trade tensions, potential slowdowns among trading partners, and regional geopolitical issues. He also noted that growth could exceed expectations if net exports perform better than anticipated and if transport links supporting the peace declaration are implemented more quickly.
Regarding fiscal policy, Tieman said, “The draft 2026 budget targeting a deficit of 4.5 percent of GDP, aims to preserve macro-fiscal stability while supporting Armenia’s priority spending needs, including on social protection, security, health, education, and infrastructure. Over the medium term, careful expenditure prioritization alongside tax policy efforts and strengthened revenue administration will continue to support a gradual fiscal consolidation to maintain debt at a moderate level. Reforms to strengthen medium-term fiscal planning, enhance public financial management—including through robust fiscal risk management and transparency—and bolster the public investment management framework remain critical to support fiscal efforts.”
Tieman commented on monetary policy as well: “Amid contained inflationary pressures and anchored inflation expectations, the current monetary policy stance is appropriate. In view of the significant uncertainty, the Central Bank of Armenia (CBA) should continue to monitor closely economic developments and inflation expectations and stand ready to adjust its policy rate as needed. The flexible exchange rate remains a key shock absorber, and the authorities’ commitment to maintaining adequate international reserve buffers is welcome. The CBA continues to vigilantly monitor financial sector risks and to upgrade its supervisory toolkit and capacity, including related to crypto assets.”
He concluded by emphasizing the government’s focus on structural reforms: “The government’s structural reform agenda appropriately focuses on strengthening economic resilience and fostering inclusive growth, including by boosting labor force participation among vulnerable populations, encouraging diversification in the country’s export basket and markets, and improving the business environment. Achieving these objectives requires timely and effective implementation of the authorities’ employment and export strategies, prioritizing governance reforms, and upgrading the insolvency framework to support quality investments.”
Tieman thanked Armenian authorities and stakeholders for their cooperation during the discussions.