Armenia's economy grows by 6.9%: Construction rises by 24.9%, while industry shrinks by 4.5% in September

Armenia's economic activity from January through September was 6.9% higher than in the same period last year, according to the Armenian Statistical Committee. In September alone, it grew by 5% compared to the same month last year. Compared to August, it increased by 9.1%. Construction is driving the upturn: it grew by 24.9% over the nine-month period.

Construction and services are driving growth, while industry is holding it back

Services (excluding trade) grew by 13% to 3.46 trillion drams. In September, they were 15.1% higher than in the same month last year. Construction output totaled 583.8 billion drams. In September, it rose by 25.9% year-over-year to 112.2 billion drams. Over the nine-month period, industrial output increased by 5.8% to 2.36 trillion drams. In September, however, it contracted by 4.5% compared to the same month last year.

Retail sales grew by only 0.6% to 5.0 bio. dram. In September, it remained flat compared to the same month last year. Agriculture declined by 4.8% to an estimated 677.1 billion drams. Electricity generation rose by 3.6% over nine months to 6.958 billion kilowatt-hours. In September, at 689.5 million kilowatt-hours, it was 9.8% below the same month last year. This figure does not include electricity sold by independent power producers on exchanges: 764.5 million kilowatt-hours in September.

The Central Bank Raises the Key Interest Rate

Prices are rising faster. Consumer prices in September were 4.3% higher than in the same month last year. Over the nine-month period, the increase was 4.5%. Industrial producer prices rose by 8.6% in September compared with the same month last year. Over the nine-month period, the increase was 8.8%.

The Central Bank of Armenia responded on September 15. The rate had been at 6.5% since December 16, 2025. The Central Bank had confirmed it as recently as August 4. It raised the key interest rate by 0.25 percentage points to 6.75%. Inflation stood at 4.4% in August; the target is 3%. Core inflation was 4.8%.

Central Bank Governor Martin Galstyan said on September 15 that the growth pointed to “the existence of excess demand.” He cited construction and services as the driving forces. He also referred to the supply side, noting that there is a risk of an oversupply developing domestically. Energy prices remained high because “tensions are rising” in the Middle East.

For German exporters, demand in Armenia is growing for construction machinery, building materials, and plant engineering. Construction is growing by a quarter. The higher key interest rate makes loans more expensive for importers and builders: payment terms and risk mitigation should be part of every negotiation. Investors should keep an eye on two things: inflation above target and the industrial sector, which weakened in September.

Sources: Statistical Committee of Armenia (EN), Central Bank of Armenia (EN), Armenpress (EN)

SK, Frankfurt