YEREVAN, August 28. /ARKA/. External price pressure, rising local food prices, and a slight expansion of domestic demand contributed to the acceleration of annual inflation in Armenia from 3.9% in June 2025 to 5.1% in June 2026. This is stated in the Central Bank of Armenia’s report on the implementation of the monetary policy program for the period from the third quarter of 2025 to the second quarter of 2026.
Core inflation over the same period increased from 3.1% to 4.9%.
Food and external price pressure
According to the Central Bank, price pressure from global food markets and rising prices for locally produced foods contributed significantly to the acceleration of inflation. The latter is partly due to the introduction of labeling and a shift in the agricultural season due to unfavorable weather conditions. In global markets, unfavorable weather in several countries and increased demand contributed to rising prices for certain products. This affected the cost of imported food products into Armenia, although the strengthening of the dram partially mitigated external price pressure.
In June, the annual price increase for locally produced food products was 9.6%, while for imported products it was 4.2%. Their contribution to overall inflation reached 1.9 and 0.6 percentage points, respectively.
Medical Services, Energy, and Demand
During the reporting period, the Central Bank recorded a slight acceleration in price growth for services, largely due to higher air travel tariffs. However, by the end of the period under review, the impact of this factor had weakened significantly.
In the first half of 2026, inflation was also accelerated by a slight increase in prices for medical services associated with the implementation of a universal health insurance system, and a significant increase in energy prices amid the escalating conflict in the Middle East. In the services sector, the regulator notes the impact of the increase in university tuition fees from September 2025 and the cost of medical services from January 2026. The acceleration in price growth for hotel and restaurant services coincided with the increase in tourist flow.
Core inflation accelerated to 4.9% year-on-year in June, exceeding the target. Significant price increases were observed primarily for off-season food products and unregulated services.
The index of fixed prices for non-tradable goods and services, which characterizes conditions in the domestic economy, also showed some acceleration. In June, its annual growth was 3.7%, exceeding the Central Bank’s inflation target.
Inflation Figures and Forecasts
The Armenian state budget for 2026 projects inflation at 3% (±1%). According to the latest data from the Armstat, 12-month inflation in July was 4.5%. According to the Central Bank’s monetary policy report for the second quarter of this year, inflation in Armenia is expected to be 4.1-3.9% by the end of 2026, depending on scenario (A-B), the forecast for 2027 is 3.6-2.9%, and for 2028 – 3.3-2.9%.
