The 'LUYS' Foundation has analyzed the Armenian Government's Medium-Term Expenditure Program for 2027-2029:
According to the Medium-Term Expenditure Program (MTEP) of the Armenian Government, the government forecasts a 5.4% economic growth for 2026, which is expected to gradually accelerate in the medium term and reach 6.1% by 2029. However, the forecasts of international organizations regarding economic growth in the medium term remain significantly conservative. This indicates that one of the most concerning aspects of the MTEP is the optimistic nature of the economic growth forecasts. Moreover, the justifications for this optimism presented in the document are mainly related to factors whose impact is either already weakening or whose implementation timelines have been repeatedly postponed in recent years. Furthermore, the MTEP simultaneously states that the forecasts for Armenia's economic growth contain significant uncertainties, including bilateral risks that are both downward (negatively impacting) and upward (suggesting positive developments). Notably, the downward risks prevail. In essence, the authors of the MTEP acknowledge that the probable deviations from the main macroeconomic scenario of the program are predominantly negative.
For the years 2027-2029, the nominal figures for total revenues and tax revenues of the state budget have been revised upward. However, this growth is not accompanied by a corresponding increase in their ratio to GDP.
The program forecasts that by 2029, total budget expenditures will amount to 4.461 trillion drams, which is 35.0% higher than the 2025 figure, while the government debt, increasing by 43.6% from 5.355 trillion drams in 2025, will reach 7.689 trillion drams by 2029. Against the backdrop of the continuous growth of total budget expenditures and government debt, a decrease in their ratio to GDP is expected by 2029 compared to 2026, due to the rapid growth of GDP.
According to the Program, the burden of government debt will significantly increase in the medium term. Debt service payments are expected to be 42.4% higher in 2029 compared to the actual figures of 2025, rising from 349 billion drams to 493 billion drams.
It is noteworthy that the program continues to repeat several forecasts whose implementation has been repeatedly postponed in previous years. The provision regarding the start of operations at the Amulsar mine is one of the most characteristic examples. Previous MTEPs also indicated that the mine would be operational in the year the program was drafted and would positively contribute to that year's economic growth. Considering that such forecasts have been regularly postponed in recent years, this further substantiates skepticism regarding the implementation of the Program.
Interestingly, the expected expenditure figure for the current year's budget is even slightly higher than the amount planned in the annual approved budget. However, it is known that during the years of the current government's activity, a sad tradition of constant underperformance of the budget has developed. According to the latest available official information, in the first quarter of 2026, budget expenditures were underperformed by 29.6%. In this situation, expecting that the actual budget expenditures at the end of the year will even exceed the planned amounts is an unfounded optimism. And if even the expected figure for the current year is unrealistic, how can forecasts made based on this inspire confidence for the next three years? In this regard, the realism of medium-term forecasts built upon them raises deep concerns.
The full analysis can be read here:
