“LUYS” Foundation analyzed the socio-economic developments of the RA economy in 2026. in January-June.

Thus.

• 2026 In June, the growth rate of economic activity slowed down from 11.7% in May to 7.7%. In January-June, the growth of economic activity was 7.9%, the main sources of which were services, industry and construction, with contributions of 3.8, 3.0 and 1.7 percentage points, respectively. At the same time, concerns about the structure of growth remain relevant. In particular, the monthly growth of the industry slowed down to 4.0% in June, and according to the January-May structural data, the growth continued to be focused on the mining industry and several separate sub-sectors.
• An 11.9% decline was recorded in the agricultural sector in January-June, counteracting the growth of economic activity by around 1.1 percentage points. The export restrictions applied by the Russian Federation may also have an impact on the deepening of the decline. causality will be assessed after detailed sectoral and foreign trade data are published. If this connection is established and restrictions are maintained, the negative impact may also extend to food processing, transport, trade and related services.
• The dynamics of foreign trade worsened in June and remains unstable. In June, exports fell by 20.5% and the cumulative decline deepened to 6.7%, while imports increased by 8.6% and cumulative growth reached 4.0%. This opposite dynamic increases the risks of deterioration of the foreign trade balance. The dynamics of trade may continue to deteriorate under the conditions of restrictions imposed by the Russian Federation.
• In the fiscal sector, high revenue growth has been maintained, but concerns about the structure of expenditures and their implementation have become more pronounced. In January-June, budget revenues increased by 14.7%, and expenses by 7.0%, forming a surplus of 67.3 billion drams. Current expenditures increased by 16.1%, while capital expenditures decreased by 28.3%, and their shortfall amounted to AMD 146.4 billion or 40.8% of the half-year plan. Instead of the projected deficit of 316.4 billion drams, as a result of the recorded surplus, the deviation of the planned and actual balances reached 383.7 billion drams. Therefore, the surplus reflects to a large extent the underperformance of capital projects in particular, and itself indicates an ineffective spending policy.
• Inflation and credit developments also require continued attention. In June, 12-month inflation accelerated to 5.1%, exceeding the Central Bank’s target range of 3±1%. At the same time, the annual growth of deposits and loans was 20.6% and 24.4%, respectively. High credit growth on the one hand supports economic activity and domestic demand, on the other hand it can sustain inflationary pressures and increase risks related to credit quality and household debt burden.

The full analysis is available at: by reference.

 “LUYS” Foundation

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