YEREVAN, August 28. /ARKA/. External price pressures, 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 report of the Central Bank of Armenia 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 for the same period increased from 3.1% to 4.9%.
Food and external price pressures
According to the Central Bank, significant contributions to the acceleration of inflation were made by price pressures from global food markets and the rise in prices for locally produced goods. The latter is partly due to the implementation of the labeling process and the shift in the agricultural season due to adverse weather conditions.
In global markets, adverse weather in several countries and increased demand contributed to the rise in prices for certain products. This affected the cost of food imported into Armenia, although the strengthening of the dram partially mitigated external price pressures.
In June, the annual price growth for locally produced food items was 9.6%, while for imported goods it was 4.2%. Their contributions to overall inflation were 1.9 and 0.6 percentage points, respectively.
Medical services, energy carriers, and demand
During the reporting period, the Central Bank recorded a slight acceleration in the growth of service prices, largely due to increased air transport tariffs. However, by the end of the reporting period, the influence of this factor had significantly weakened.
In the first half of 2026, the acceleration of inflation was also supported by a slight increase in prices for medical services related to the implementation of the universal health insurance system and a significant rise in energy prices amid escalating conflict in the Middle East.
In the services sector, the regulator notes the impact of increased tuition fees in universities starting in September 2025 and the cost of medical services from January 2026. The acceleration in the growth of hotel and restaurant prices coincided with an increase in tourist flow.
The acceleration of core inflation to 4.9% in June on an annual basis led to exceeding the target indicator. Significant price increases in its structure were observed mainly for non-seasonal food products and unregulated services.
The index of rigid 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 target inflation indicator set by the Central Bank.
Figures and inflation forecasts
The Armenian state budget for 2026 assumes an inflation rate of 3% (±1%). According to the latest data from ArmStat, the 12-month inflation rate 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 in the range of 4.1-3.9% depending on the scenario (A-B) for the end of 2026, with forecasts for 2027 at 3.6-2.9% and for 2028 at 3.3-2.9%.
