What Impact Will Sanctions Against Russia Have on Armenia? Economists Weigh In

What impact will sanctions against Russia have on Armenia? Economists have expressed their views on the subject, addressing both the negative and positive aspects of the sanctions.

"A 1% decline in Russia's economy could affect Armenia by a reduction of 0.7 percentage points. This means that in a pessimistic scenario, if Russia's economic decline is within the range of 6-10%, then in Armenia this decline could reach 4-6%. Up until August 31, 2022, grain exports to EAEU countries are generally suspended; however, to avoid unnecessary speculation, it should be noted that according to data provided by the ministry, EAEU countries have already made the necessary purchases for the 2021-22 season. In other words, they have purchased as much as was required, and if during that period any EAEU country, including Armenia, needs to carry out additional imports, this can be done smoothly through a licensed process," said Meri Hovsepyan, an economist at the “AMBERD” research center.

“I believe that imports will, in some sense, increase because the decline of the Russian ruble is preparing fertile ground for an increase in the volume of goods imported from Russia. This means that Russia is gaining a competitive advantage in various markets, not just the Armenian market, and I believe it will take advantage of that. It should also not be forgotten that there is a significant price increase in global oil and gas markets, which will positively impact Russia, a country with huge volumes of mineral resource extraction. Therefore, it is not the case that everything must be presented in exclusively black and dark colors; these circumstances are actually sending positive signals to the Russian economy. Certainly, today, the Russian economy is facing serious challenges, but on the other hand, to think that this will directly obliterate or incapacitate the Russian economy is, in my opinion, not entirely correct,” stated Karlen Khachatryan, head of the Department of Economics and Management at Yerevan State University.