Armenia's five-month budget surplus amounted to 0.8% of GDP — WB
21.07.2026,
10:31
Armenia's state budget surplus for January-May 2026 amounted to 0.8% of estimated annual GDP, while a deficit of approximately 4.3% of GDP was planned for the full year.
YEREVAN, July 21. /ARKA/. Armenia's state budget surplus for January-May 2026 amounted to 0.8% of estimated annual GDP, while a deficit of approximately 4.3% of GDP was planned for the full year. This is stated in the World Bank's Armenia Monthly Economic Update – July 2026.
According to the document, a budget deficit of 0.2% of projected annual GDP was recorded in May itself.
"Tax revenues in May increased by 15.3% compared to the same period in 2025. The main contribution was made by personal income tax revenues, which increased by 22.5% year-on-year," WB experts note.
The World Bank attributes this growth to a 4% increase in the labor force and a 10.8% increase in the average nominal wage.
Value-added tax revenues increased by 14.6% year-on-year, which, according to the review, reflects strong economic activity and further improvements in the efficiency of tax administration.
"Total government budget expenditures in May decreased by 6.1% compared to May last year. This was driven by a 54.5% decrease in capital expenditures due to the suspension of defense spending, as a lower defense budget was planned for 2026," the review states.
At the same time, it notes that recurrent expenditures increased by 17.3% year-on-year, primarily due to a 27.5% increase in social spending.
The review notes that the increase in social spending is largely due to the launch of the universal health insurance system, which has been in effect since January 2026.
"Under this program, the state fully subsidizes insurance premiums for children, the elderly, and vulnerable groups. As a result, healthcare spending by functional classification increased by 75.9% year-on-year," the study states.
According to the document, a budget deficit of 0.2% of projected annual GDP was recorded in May itself.
"Tax revenues in May increased by 15.3% compared to the same period in 2025. The main contribution was made by personal income tax revenues, which increased by 22.5% year-on-year," WB experts note.
The World Bank attributes this growth to a 4% increase in the labor force and a 10.8% increase in the average nominal wage.
Value-added tax revenues increased by 14.6% year-on-year, which, according to the review, reflects strong economic activity and further improvements in the efficiency of tax administration.
"Total government budget expenditures in May decreased by 6.1% compared to May last year. This was driven by a 54.5% decrease in capital expenditures due to the suspension of defense spending, as a lower defense budget was planned for 2026," the review states.
At the same time, it notes that recurrent expenditures increased by 17.3% year-on-year, primarily due to a 27.5% increase in social spending.
The review notes that the increase in social spending is largely due to the launch of the universal health insurance system, which has been in effect since January 2026.
"Under this program, the state fully subsidizes insurance premiums for children, the elderly, and vulnerable groups. As a result, healthcare spending by functional classification increased by 75.9% year-on-year," the study states.
