ArmInfo. The reduction in Armenia's state budget deficit to GDP ratio from 5.5% to 3.7% recorded in 2025 is a remarkable achievement. This was stated by RA Minister of Finance Vahe Hovhannisyan on March 23 at a meeting of the RA National Assembly Committee on Financial, Credit, and Budgetary Affairs while presenting a report on the ministry's work in 2025 under the 2021-2025 government program.
According to the minister, the country's public debt to GDP ratio was expected to be over 50% in 2025, but last year not only achieved a lower result but also a significantly lower figure compared to the previous year (by 0.7 percentage points). Vahe Hovhannisyan continued that this is explained by two factors: higher GDP growth rates, which exceeded the planned figure by 2 percentage points, and higher tax collection. Ultimately, this resulted in a lower state budget deficit to GDP ratio (3.7% instead of the planned 5.5%). This, according to Vahe Hovhannisyan, is a remarkable result, leading to a reduction in the public debt trajectory. The minister expressed hope that, as a result of the state's fiscal policy, this downward trend will continue in the near future.
As a reminder, Deputy Minister of Finance of the Republic of Armenia Arman Poghosyan previously reported that by the end of 2025, the country's public debt would amount to $14.531 billion. Compared to the end of 2024, it has increased by $1.7 billion, or 13.1%. In dram equivalent, public debt increased over the past year from 5 trillion 092.7 billion to 5 trillion 541.7 million drams. The public debt/GDP ratio decreased by 0.7 percentage points, reaching 47.3%, ensuring compliance with fiscal rules (below 50% of GDP).
By the end of December 2025, the share of domestic debt in the government's debt structure increased from 51.8% (by the end of 2024) to 53.4%, while the dram-denominated debt increased from 50.8% at the end of last year to 52.9%.
At the same time, from January to December 2025, the budget deficit was financed through net borrowings of 438.7 billion drams (399.9 billion drams for the entire 2024, while the annual program for 2025 is 639.4 billion drams). Of this, 297 billion drams were raised from domestic sources (net proceeds from the placement of government treasury bonds), and 141.7 billion drams from external sources, with the annual program of 291.4 billion drams and 348 billion drams, respectively. It should be noted that 394.1 billion drams were allocated for servicing government debt (interest payments), compared to the planned 360.8 billion drams for the entire 2025 (313.6 billion drams in 2024).
According to the 2026 state budget, by the end of this year, government debt will amount to $15.152.8 billion (6.310.3 trillion drams), representing 52.9% of GDP. Repayment and servicing of the government debt will require 1.05 trillion drams (420 billion drams alone for interest payments).
