Armenia credit rating affirmed at ‘BB-’ by S&P amid growth forecast cut

S&P Global Ratings has affirmed Armenia’s sovereign credit rating at ‘BB-’ with a positive outlook. While the agency noted that an upgrade is possible if external finances strengthen and regional security stabilizes, it also lowered the 2026 real GDP growth forecast to 4.9 percent from a previous projection of 7.1 percent.

The downward revision in growth expectations is partly attributed to Russian restrictions on various Armenian exports, including mineral water, alcoholic beverages, fish, and fresh produce. These bans affect goods representing approximately 2 percent of Armenia’s GDP. S&P noted that while exporters may redirect trade toward the European Union, the situation highlights Armenia’s vulnerability to bilateral trade disruptions with Russia.

On a positive note, Armenia’s foreign currency reserves reached a record $6.9 billion in June, a 46 percent increase from the previous year. This growth was driven by government Eurobond issuance, central bank purchases, and strong capital inflows. The agency expects the government of Prime Minister Nikol Pashinyan to continue pursuing structural reforms and strengthening economic ties with Western partners.