Private consumption growth recorded in Armenia in second quarter of 2026 – Central Bank

Private consumption growth remained high in the second quarter of 2026, continuing to outpace economic growth and reaching 7.8%, according to a report by the Central Bank of Armenia.

The report noted that private consumption contributed 5.4 percentage points to economic growth. Strong consumer activity has been supported by rising incomes, including as a result of a significant increase in government social spending, the continued rise in the prices of financial and non-financial assets and their persistence at high levels, as well as, probably, more optimistic expectations about the future, reflected in the spending of savings accumulated in the previous period and high rates of credit growth.

“In the second quarter of 2026, growth in gross investment accelerated significantly, reaching 9.0% year-on-year. The rapid growth of the construction sector continues to make a significant contribution to this. At the same time, recent months have also seen a sharp acceleration in imports of capital goods, reflecting, among other things, imports of equipment needed for the construction of AI factories.

“Uncertainty surrounding the outlook for domestic demand remains. On the one hand, domestic demand and the resulting inflationary pressures could increase, driven by rising incomes, higher asset prices and the prolonged continuation of current lending trends, also taking into account the gradual easing of lending conditions.

“At the same time, amid positive geopolitical developments surrounding Armenia, the potential unblocking of regional transport links could improve the investment environment, contributing to increased economic activity.

“Meanwhile, geopolitical and regional factors, including restrictions on exports to Russia and growing uncertainty surrounding their outlook, could negatively affect sentiment towards both consumption and investment.

“Moreover, considerable uncertainty over the current state and medium-term outlook of the Russian economy, together with the gradual tightening of migration policy, could constrain seasonal labour flows to Russia, reducing remittance inflows while also contributing to an increase in labour supply in Armenia and predominantly creating disinflationary risks. Private consumption remains the main driver of economic growth,” the report said.