Armenia’s economy accelerated sharply in September, posting 10.5% year-on-year growth driven by manufacturing and metals production, the World Bank said in its latest monthly update.

The September result was a rebound from 7.5% growth in August, pushing cumulative expansion for the first nine months of 2025 to 7.6% — well above initial forecasts.

Industrial output increased 10.1% in September compared with 5.8% in August, supported by a 12.1% rise in manufacturing and continued strong expansion in food processing and base metal production, the report said. Construction remained one of the fastest-growing sectors, up 22% year-on-year, while services excluding trade rose 7.9%.

Business activity also improved, with new registrations jumping 26.8% month-on-month after falling in August, driven by growth in registrations of individual entrepreneurs and limited liability companies.

Net non-commercial money transfers — largely remittances — rose 16.2% year-on-year in September, fuelled by a 60% increase in inflows from Russia, which accounted for almost two-thirds of the total.

Inflation remained stable at 3.7% in October, supported mainly by higher food and beverage prices, and the central bank kept its benchmark refinancing rate unchanged at 6.75% for a sixth consecutive meeting.

Trade continued to contract but at a slower pace as Armenia winds down re-exports of precious stones and metals. Exports fell 24.4% year-on-year in September versus a 41% drop in August, while imports declined 19.5%. Excluding re-exported goods, exports rose 16.7% and imports climbed 7.3%.

The Armenian dram remained broadly stable against the U.S. dollar in October, appreciating 1.2% year-on-year, while depreciating against the euro and Russian ruble. Foreign reserves held steady at $4.3 billion, equal to 3.4 months of import coverage.

Bank lending rose 2.1% month-on-month in September, driven by local currency consumer and mortgage loans, while deposits increased 1.1%.

Government finances remained stronger than planned, with a September deficit equal to 0.1% of projected annual GDP. Tax revenues rose 8.7% year-on-year, buoyed by gains in VAT, income and profit tax collection. Spending increased 23%, including a sharp rise in capital expenditure linked to defense and ongoing investment in school upgrades.

Armenia posted a cumulative deficit of 0.73% of estimated GDP for the first three quarters, far below the government’s full-year deficit target of 5.5%.