Why has the average pension in Armenia decreased?

The draft budget of Armenia for 2026 includes a 9.6% increase in social security spending. However, this will not be achieved through pension increases but rather through government contributions, funded pension schemes, and other social payments. While none of these areas are less important, it’s worth noting that these are selective solutions. A broad improvement in the social landscape seems unlikely.

The reason is not a lack of economic growth. Growth is planned—and it is quite promising for our economy. In fact, the 2026 budget projects a higher growth rate than some international organizations forecast. The economy will grow, but social payments will not grow proportionally—or may not grow at all. They might even shrink.

In 2024, we ended the year with a 5.9% economic growth rate. Although lower than the previously forecasted 7%, it is still a solid figure. However, during this period, the average pension decreased compared to 2023. The average size of social benefits also fell.

There are many factors that must be considered for objectivity. First of all, this is an average figure, which doesn’t reflect the full picture across all segments of the population. Still, the overall decline in the average during the summer indicates a deepening of negative trends.

What are the reasons? First and foremost, the structure of economic growth—what drives it. This growth is not inclusive; it doesn’t affect broad segments of society, and the current situation is one of its manifestations. Another reason is the budget and its associated expenditures. In this context, the growing debt burden and the rising cost of servicing it cannot be ignored. Naturally, this leads to cuts in other expenditures, including socially significant ones. As a result, although social spending has increased, it has been directed toward areas with acute need and has not had a widespread impact.

Returning to a planned 9.6% increase in social spending and a projected 5.4% economic growth in 2026, what guarantees do we have that these impressive figures will lead to systemic social solutions for the broader population—especially amid alarmingly rising inflation?