Export limits to Russia threaten growth, Central Bank of Armenia says

Restrictions on Armenian exports to Russia could lead to a 2% decline in Armenia’s GDP, the Central Bank has confirmed.

Central Bank Governor Martin Galstyan made the statement at a press conference, Caliber.Az reports, citing Armenian media.

He said that exports of Armenian goods to Russia account for about 6% of the country’s GDP. At the same time, goods affected by Russian restrictions make up roughly one-third of that volume, or around 2% of GDP. The scale of the potential negative impact will depend on the duration of the restrictions, Galstyan noted.

He emphasized that a 2% GDP decline represents a worst-case scenario, assuming a prolonged continuation of restrictions and the absence of alternative export markets for Armenian products.

The Central Bank also believes that such a negative scenario could reduce inflation by 0.6 percentage points. This refers to a situation in which fruits, vegetables, and flowers intended for export to Russia cannot be sold in other markets, resulting in a domestic supply surplus and falling prices.

As a support measure for farmers, the Central Bank is discussing the possibility of offering loan repayment deferrals. This measure is being considered in view of the fact that agricultural producers may lose part of their income due to circumstances beyond their control. Discussions are currently taking place at the Central Bank level, without the involvement of the government or commercial banks, as there are currently no signs of widespread loan defaults among farmers.

By Vafa Guliyeva