The Armenian government intends to invest $2.5 billion in the development of the army over the next five years, Acting Prime Minister of Armenia Nikol Pashinyan has announced.

Pashinyan says additional funds for the development of the army can be obtained by changing the structure of the economy:

“Our goal is to modernize the military-industrial complex. I see the solution of this problem in the transformation of Armenia into a technological and engineering country.”

Additional funds should, in particular, go towards increasing military readiness.

In 2019 the Armenian government will allocate about $647 million to defence, a quarter more than the current year. This is the second year in a row that the defence budget has grown significantly. In 2018 the budget was $518 million – 17 per cent more than in 2017.

The increase of the military budget is partly due to the growth of the Armenian economy.

In 2018, the country’s GDP increased by 6.5 per cent, while this year five per cent growth is forecasted. Moreover, defence will be allocated 4.5 per cent of the GDP. In developed countries, the military budget tends not to exceed two per cent of the GDP.

The decision to increase military spending is due to the ongoing arms race between Armenia and Azerbaijan. The situation on the line of contact of the troops of the two countries is consistently tense.

A sharp increase in the military budget of Armenia may be associated with another loan from Russia, which has been allocated to Armenia for the purchase of a new batch of weapons.