Armenia bracing itself to face fallouts of anti-Russian sanctions

Armenia bracing itself to face fallouts of anti-Russian sanctions

As Armenian Economy Minister visits Moscow, Yerevan faces multiple challenges due to sanctions on Russia. See more on threats and opportunities opening 

Armenian Economy Minister Vahan Kerobyan met with Russian and Eurasian Union officials in Moscow, the minister’s official Facebook Page said on 12 April. Kerobyan discussed expanding cooperation in industry, trade and mutual investments.  

The news is interesting particularly against the backdrop of growing sanctions against Russia due to the lingering hostilities in Ukraine with no end in sight.   It is beyond doubt that this situation will take a toll on the Armenian economy as well and this is what expert forecasts confirm. 

The European Bank of Reconstruct and Development (EBRD) in a report by the end of March predicted a 10-percent decline in the Russian economy, which given the low chances of the war ending soon, is likely to increase. Meanwhile the same institution projects a modest growth of 1.2 per cent for Armenia, which is a decline from a previous one by 4.1 per cent. Needless to say, this figure is most likely an optimistic estimate and the situation since the time it was created has only deteriorated. 

An economy expert, Hrant Mikayelyan commenting to 1in.am on the impact of the depreciation of the ruble, opined that in short term it is unlikely that the prices for the goods imported from Russia will drop, given the fluctuations of the exchange rate and the market. The expert suggested that the political situation and sanctions imposed on Moscow could have a double effect on Armenian exports. While the Russian market would need more consumer goods and Armenia can increase exports of that category the fate of the remaining part of the exports will be less inspiring. Mikayelyan also said that the main challenge for the Armenian economy is not as much shrinking volume of transfers or the dwindling demand on workforce, but the very uncertainty looming over the mutual trade. 

A possible strategy for overcoming the possible deadlock for the Armenian economy, the experts suggests, is looking for export markets chiefly in the Asian countries, like Iran, India etc., while also keeping an eye on the EU markets, where the standards and regulations are much stricter.