Against the backdrop of the Russia-Ukraine war, the West approved a package of sanctions against Russia. The sanctions may also affect the Armenian economy to some extent, since Russia is Armenia's key trade partner and accounts for a large share of Armenian exports, thus the country cannot remain aloof from these processes.
The war has already started to negatively impact the economy. First, the ruble is rapidly depreciating against the dollar and the euro, which will create problems for exports of Armenian goods.
Economists say that the sanctions will cause both economic and financial losses. In particular, investments and the volume of private transfers are expected to drop sharply, while the decline in the solvency of the Russian market may lead to a reduction in exports from Armenia to the country.
"The devaluation of the Russian ruble means that Russians' purchasing power will significantly decrease, i.e. Russian consumers will be able to buy almost two and a half times less goods for the same amount," economist Tatul Manaseryan, head of the Alternative Research Center, said in an interview to Panorama.am on Monday.
Naturally, according to him, exports of Armenian goods to Russia will cut and the Armenian products will become uncompetitive in the Russian market due to the ruble devaluation.
"The Armenian dram has revalued against the Russian ruble and the Ukrainian hryvnia, which means that the prices of exported products have increased and the demand for goods exported from Armenia will decrease in these markets. Naturally, the export rate cannot remain the same,” the economist explained.
“Therefore, Armenia should try to find new markets for both exports and imports. The more we diversify the imports and exports sources, the more flexible and competitive our economy will be," Manaseryan added.
According to the economist, due to the devaluation of the Russian ruble, transfers may decrease, thus the income of people living on remittances will also decrease.
"The reduction in private transfers will lead to a drop in the people’s purchasing power. It will also have a negative impact, as 10-12% of Armenia's population lives off remittances. Here we will see a certain increase in poverty, which will reduce consumption in Armenia," he said.
