Armenia's central bank sees gas price hike as unlikely, warns of inflation risk

The head of Armenia’s Central Bank has said that a scenario involving an increase in the price of Russian gas is considered highly unlikely, though he warned it could still have inflationary consequences for the economy if it were to materialise.

Speaking at a press conference, Central Bank Governor Martin Galstyan said that while there has been public discussion suggesting gas prices are unlikely to rise due to a long-term intergovernmental agreement, such outcomes could not be entirely ruled out, Caliber.Az reports, citing Russian media.

“These are scenarios that could occur, but in our assessment their probability is extremely low,” he said. “If this were to happen, it would, of course, lead to inflation, as it would affect production and have secondary effects.”

Galstyan noted that higher energy costs would likely feed through to domestic prices, adding pressure on inflation via production and broader economic channels.

However, he stressed that the central bank has no preventive policy tools to address potential increases in gas prices directly.

“In the Central Bank’s toolkit, there is no instrument that would allow us to take preventive action in relation to a rise in gas prices,” he said. “We will act on a post-factum basis, if we observe developments and assess their impact.”

By Aghakazim Guliyev