YEREVAN, July 29. /ARKA/. Armenia’s public debt could increase to approximately 50% of GDP by the end of 2026, but the World Bank does not view this level as a significant threat to the country’s macroeconomic stability, said Armine Manukyan, Senior Economist at the World Bank.
“According to the results of the first five months of 2026, Armenia’s public debt amounted to 41.3% of GDP, which is lower than the figure at the end of last year,” Manukyan said, responding to a question from ARKA at the presentation of the World Bank report “Armenia’s Economic Pulse: Towards Poverty-Reducing Growth through More Effective Fiscal Policy.”
According to her, the expected increase in the debt burden in the second half of the year will be due to increased capital expenditures, a growing state budget deficit, and the attraction of new loans, which had previously been deferred.
“The World Bank does not see significant risks even if public debt reaches 50% of GDP. The Armenian authorities are quite cautious in managing debt and are committed to maintaining it at a moderate level,” Manukyan said.
She noted that 50% of GDP is the second threshold stipulated by Armenia’s fiscal rule. Exceeding it is not prohibited, but in that case, the government must submit a debt reduction program over the next two years.
Manukyan noted that the medium-term public expenditure program envisages higher borrowing, but the actual amount of funds raised will depend on budget execution.
“Last year, public debt was also projected to reach 50% of GDP, but by the end of the year, it was 46.7%,” she said.
According to Manukyan, the public debt-to-GDP ratio is also influenced by economic dynamics: with higher GDP growth, the debt burden relative to the size of the economy decreases.
“Reaching 50% of GDP in itself does not pose a serious threat, especially if debt reduction is planned for the future. However, it is necessary to see how the situation develops in the second half of the year,” Manukyan noted.
On Armenia’s public debt
Earlier, Deputy Minister of Finance Avag Avanesyan stated that the Armenian government aims to increase the public debt-to-GDP ratio to 45%.
According to the Ministry of Finance, Armenia’s total public debt as of March 31, 2026, amounted to $14.077 billion, compared to $13.906 billion as of December 31, 2025.
In the structure of public debt, the government’s debt amounted to $14 billion 68.95 million, of which external debt was $6 billion 672.6 million, and internal debt was $7 billion 396.3 million. The debt of the communities amounted to $8.18 million, including external debt of $8.03 million, and internal debt of $0.15 million. The external debt of the Central Bank of Armenia at the end of March 2026 amounted to $482.4 million.
