Yerevan: The Armenian authorities are drafting a new Constitution, with expectations to complete the document by March, followed by a referendum after the June parliamentary elections, APA-Economics reports.

According to Azeri-Press News Agency, this constitutional reform is significant in the context of peace negotiations with Azerbaijan. A key point of discussion is whether to retain references to the 1990 Declaration of Independence in the preamble, which Azerbaijan views as potential territorial claims. SandP's assessment suggests that while progress in negotiations might reduce security risks in the short term, a final and legally binding peace agreement will take some time to materialize.

The agency highlights the upcoming parliamentary elections in June as a crucial test for political stability and policy continuity. Recent opinion polls show Prime Minister Nikol Pashinyan and his Civil Contract Party leading, although their support has declined since the 2021 snap elections. The opposition remains fragmented, with no unified leadership emerging among various political and social groups.

The baseline scenario predicts general policy continuity following the June elections, with an expectation that the new government will continue efforts to achieve a comprehensive peace agreement with Azerbaijan. Spending priorities are also being adjusted, maintaining high levels of capital investment to support medium-term economic growth, while defense spending is set to decrease in both nominal terms and as a share of GDP. This reduction is linked to the anticipated decline in security risks amid ongoing peace negotiations with Azerbaijan.