YEREVAN, July 20. /ARKA/. International rating agency Fitch expects inflation in Armenia to remain within the target level until 2027, although soft fiscal policy and the projected moderate weakening of the dram create certain risks.
“In the first half of 2025, the average inflation rate was 3.3% year-on-year, which is in line with the Central Bank’s target of 3% (with a fluctuation range of +/- 1 p.p.), which was revised downwards from 4% from January 2025,” the agency said in a report published on its website.
Fitch analysts note that policy rates have been cut by a total of 225 basis points since 2024 to 6.75%, and Fitch assesses the scope for further cuts this year as limited.
“The level of dollarization remains high (47.6% of deposits and 32% of loans in May 2025), but has been declining from peaks of 72% and 66%, respectively, reached in 2014,” the study notes.
In a current report published on July 18, Fitch Ratings affirmed Armenia’s Long-Term Foreign Currency Issuer Default Rating (IDR) at ‘BB-‘ with a Stable Outlook.
On Inflation
According to Armstat, 12-month inflation in the consumer market of Armenia in June of this year amounted to 3.9%. At the same time, in January-June 2025, compared to the same period in 2024, prices increased by 3.1%.
Forecasts
The inflation rate in the state budget of Armenia for 2025 is set at 3% (±1%). According to the Central Bank’s report on monetary policy for the second quarter of this year, by the end of 2025, inflation in Armenia is expected to be 3.4-3.2% depending on the scenario (A-B), the forecast for 2026 is 3.2-2.9%, and for 2027 – 3.2-3.1%.
The World Bank expects inflation in Armenia to be 3.5% in 2025 and 4% in 2026. The IMF predicts that prices in Armenia will grow by 3.3% in 2025 and by 3% in 2026. According to ADB forecasts, inflation in Armenia in 2025 will be 2.5%. EDB expects inflation in Armenia at the end of the current year to be 3.1%.
