Increase in Prices Expected Due to Situation in Iran, Galstyan Does Not Exclude

The situation in the Hormuz Strait has caused disruptions in supplies that affect not only energy resources but also essential agricultural products. This was stated by the President of the Central Bank of Armenia, Martin Galstyan, during a meeting of the National Assembly's Permanent Committee on Financial-Budgetary Affairs, while presenting a report on the challenges and confirmed monetary policy for the first quarter of 2026.

“There is a risk of rising food prices, which is already partially becoming a reality,” said the Central Bank president.

He reminded that since the beginning of 2026, there has been a worsening of instability and risks associated with the conflict in the Middle East, the rise and high volatility of energy prices, and the limitation of trade routes. Risks of worsening economic growth prospects and significant expansion of the inflationary environment are also observed in Armenia's main partner countries.

“In particular, the economic growth in the U.S. has slowed somewhat in the last quarter, showing significant volatility. The trend of weakening economic growth has continued in the Eurozone. Meanwhile, indicators of economic activity in Russia indicate a slowdown in economic growth and a significant weakening of domestic demand in the first quarter,” stated Galstyan.

At the same time, as pointed out by the Central Bank's president, there continues to be high economic activity in Armenia in the first quarter of 2026, largely supported by substantial growth in the construction and services sectors.

“In recent months, high activity in the services sector has been accompanied by noticeable structural shifts towards sub-sectors whose growth is mainly driven by the expansion of demand. Certain signals of external demand expansion are also observed, which is primarily expressed in the increase of tourist flows to Armenia against the backdrop of the tensions prevailing in the Middle East,” concluded the Central Bank head.