S&P Global Ratings Upgrades Armenia’s Outlook to Positive
Yerevan, February 21 – S&P Global Ratings, the international credit rating agency, has revised Armenia’s outlook from stable to positive, while affirming its ‘BB-/B’ long- and short-term foreign and local currency sovereign credit ratings. The announcement was made on February 20, with the agency highlighting several key factors contributing to this positive shift.
The upgrade to a positive outlook primarily reflects the agency’s view on the potential for improved regional geopolitical and security dynamics. Specifically, S&P Global Ratings points to further progress in normalizing diplomatic and trade relations between Armenia and Azerbaijan as a significant driver.
“The revision to a positive outlook reflects our view that there is potential for improving regional geopolitical and security dynamics, particularly in terms of further progress toward normalizing diplomatic and trade relations between Armenia and Azerbaijan,” the agency stated in its report.
Robust Economic Growth and Central Bank Reserves
S&P Global Ratings considers Armenia’s growth prospects favorable. The agency emphasized that higher levels of international reserves held by the Central Bank of Armenia and a flexible exchange rate mechanism are expected to mitigate potential unexpected external shocks. This robust financial buffer provides the country with greater resilience against global economic volatility.
Analysts at S&P Global Ratings project Armenia’s real GDP to grow by 5.3% this year, with a projected growth of 4.8% by 2027. These figures underscore a strong and sustained economic performance, contributing to the country’s improved creditworthiness.
Key Economic Indicators and Recent Developments
Recent economic data from Armenia further supports the positive outlook. According to official statistics, Armenia’s average economic growth has exceeded the target of 7%, reaching 7.9%. This is approximately 2.3 times higher than the global average, as noted by the Minister of Economy.
Preliminary data for 2025 indicates that Armenia’s GDP increased by 7.2% compared to 2024, surpassing 11.3 trillion drams. This consistent growth trajectory highlights the effectiveness of current economic policies and reforms.
Furthermore, discussions between Armenia and the EU have focused on the implementation of the Armenia-EU strategic partnership agenda, aiming to deepen economic ties and foster greater integration. Trade and economic relations with Georgia have also been emphasized, with both countries underscoring the strategic importance of unimpeded transit of goods and business connections.
Infrastructure Investments and Agricultural Development
Investments in key sectors continue to bolster Armenia’s economic landscape. Russia has invested over 30 billion rubles in Armenia’s railway system over nearly 20 years, significantly enhancing infrastructure and connectivity. In the agricultural sector, greenhouse farms covering 85 hectares have been established with investments totaling 43 billion drams, with an additional 64 hectares currently under construction.
Japan and the UN Development Program have pledged 5.2 million USD to support agricultural development and displaced persons in Armenia, further contributing to socio-economic stability in local communities.
Energy Sector and Future Prospects
In the energy sector, the construction of a modular nuclear power plant is considered the most preferred option for Armenia, as stated by Mesrop Mesropyan, Chairman of the Public Services Regulatory Commission, in discussions about cooperation with the United States.
The World Bank analysts note that economic activity growth in Armenia significantly exceeded expectations in 2025, primarily driven by industrial production and construction in December. These positive trends across various sectors paint a promising picture for Armenia’s economic future.
The positive outlook from S&P Global Ratings is a significant endorsement of Armenia’s economic resilience and its potential for continued growth and stability amidst evolving regional dynamics.
