Social Spending to Increase in 2026: Vahe Hovhannisyan

During the discussion of the draft state budget for 2026 in the National Assembly, Minister of Finance Vahe Hovhannisyan presented the structure of expenditures of various departments, noting that the most significant increase has been recorded in the social sector.

According to the Minister, the budget of the Ministry of Labor and Social Affairs will increase by 87 billion drams, the Ministry of Education, Science, Culture and Sports by 57 billion, the Ministry of Health by 44 billion, and the Ministry of Finance by about 42 billion. At the same time, a reduction of 101 billion drams is anticipated in the defense sector, while the expenditures of the Ministry of High Technology Industry will decrease by 10 billion.

Hovhannisyan informed that in 2026, the amount of external financing of state budget expenditures will be 154 billion drams, of which 133.5 billion will be loan funding, and 20.5 billion will be grant funds. A significant part of capital expenditures, around 583 billion drams, will be financed from domestic sources.

The Minister emphasized that social expenditures will increase by 3 percentage points compared to 2025, constituting 44 percent of the budget, while the share for defense, security, and judicial systems will decrease to 22 percent. He stated that programs financed by external sources allow the government to maintain debt sustainability without incurring excessive interest payments.

Hovhannisyan also noted that although the absolute figures for debt servicing costs will increase, their ratio to GDP will remain stable. “This year we will already achieve about 40 billion drams in savings in debt servicing, which indicates the effectiveness of financial management,” the Minister stressed.