Amid sustained economic growth, the Armenian government has increased the country’s modest pensions by approximately 7 percent. The government also granted approval for similar increases in disability benefits, which also came into effect on July 1.

During a cabinet meeting, Minister of Labor and Social Affairs Narek Mkrtchyan announced that the average monthly pension in Armenia would be around 50,000 drams ($128). Mkrtchyan also stated that retired military personnel would receive a monthly pension of 91,600 drams. Additionally, the government has increased the minimum pension by nearly 14 percent, raising it to 36,000 drams.

Narek Mkrtchyan also mentioned that the current value of the “consumer basket” calculated by the Armenian Statistical Committee is slightly above 80,000 drams. He further stated that the government is dedicated to progressively raising the average pension to this level in the upcoming years.

The increases in pensions were made feasible due to Armenia’s robust economic growth, which surpassed 12 percent in 2022 and appeared to be ongoing without any signs of slowing down.

According to Hrant Mikaelyan, a political scientist and researcher at the Caucasus Institute in Yerevan, the recent decision by the Armenian government to increase pensions and allowances starting from July 1, 2023, does not adequately account for inflation and cannot be considered proper indexation.

“The rise of the nominal pension will be reflected only in the sense that it will more or less, and even not completely, preserve the purchasing power of the pension. That is, if you look at the dynamics of pensions adjusted for inflation, pensions have gradually decreased over the past three years. Moreover, in 2023-2025 they will still be lower than in 2015 or 2017 in relation to the consumer basket,” Mikayelyan said. 

The expert added, "In principle, a different methodological approach is needed here. First, indexation should be carried out relative to the rate of inflation. The population should not be grateful to the government when it raises pensions. The government should increase pensions at least at the rate of inflation.”