Key facts
- Source
- Hovhannes Khachatryan, deputy governor of the Central Bank of Armenia
- Event
- Press conference on Tuesday
- GDP risk
- 1.5 to 2 percent
- Affected entities
- Tens of thousands of economic entities and farmers
- Russian export restrictions
- In effect for two months
- Tourism
- Sharp increase in May; redirection from Middle East to South Caucasus
Background
Armenia's economy is being affected by instability around Iran, according to Hovhannes Khachatryan, deputy governor of the Central Bank of Armenia (CBA). Speaking at a press conference on Tuesday, he said the country has experienced and continues to experience problems with logistics and energy prices due to the situation.
At the same time, Khachatryan noted a redirection of tourist flows from the Middle East to the South Caucasus. He said a sharp increase was recorded in Armenia's tourism sector in May.
Current situation
Khachatryan said export restrictions imposed on Armenia by Russia have been in effect for two months and have affected Armenia's economic indicators. He estimated the risks to Armenia's GDP from these restrictions at 1.5 to 2 percent, with tens of thousands of economic entities and farmers engaged in the sectors under restrictions.
Despite these challenges, the CBA deputy governor said high economic indicators were recorded in Armenia in June and July, as other sectors such as construction and the service sector continue to grow at high rates. He also mentioned a 10 percent drop in prices in Armenia's fish market.
| Indicator | Value |
|---|---|
| GDP risk from Russian restrictions | 1.5 to 2 percent |
| Price drop in fish market | 10 percent |
Impacts
The instability around Iran has led to logistics and energy price problems for Armenia, affecting its economy. The redirection of tourist flows from the Middle East to the South Caucasus has boosted Armenia's tourism sector, with a sharp increase recorded in May.
According to Khachatryan's forecasts, if tourist flows to Armenia increase, salaries in the country's restaurant and hotel businesses may increase. The Russian export restrictions have affected Armenia's economic indicators, with risks to GDP estimated at 1.5 to 2 percent.
The restrictions affect tens of thousands of economic entities and farmers in Armenia. However, Khachatryan noted that if there were no restrictions on Armenia's exports to the Russian market, Armenia would most likely have experienced high inflation in seasonal products.
Future outlook
Scenario analysis: The possibilities below are not certain predictions.
Looking ahead, if tourist flows to Armenia continue to increase, salaries in the restaurant and hotel businesses may rise, according to Khachatryan's forecasts. This could provide some economic benefit amid the challenges.
The duration and impact of the Russian export restrictions remain unclear. If they persist, they could continue to weigh on Armenia's GDP, with risks estimated at 1.5 to 2 percent. However, if other sectors such as construction and services maintain high growth, they may offset some of the negative effects.
The situation around Iran remains a factor. If instability continues, Armenia may face ongoing logistics and energy price problems. Conversely, if the situation stabilizes, these pressures could ease.
Source: news.am
