Central Bank assessed impact of escalation in Middle East on inflation in Armenia
17.03.2026,
16:36
The escalation of the situation in the Middle East could have an additional impact on inflation in Armenia within the range of 1.2-1.7%, stated Central Bank of Armenia Chairman Martin Galstyan, responding to a question from ARKA news agency.
YEREVAN, March 17. /ARKA/. The escalation of the situation in the Middle East could have an additional impact on inflation in Armenia within the range of 1.2-1.7%, stated Central Bank of Armenia Chairman Martin Galstyan, responding to a question from ARKA news agency.
"The Board of the Central Bank of Armenia has attempted to estimate this impact. According to our estimates, the impact could be around 1.2-1.7%. The main factors are rising oil prices, increased import costs due to the use of alternative logistics routes, and the possible substitution of food products imported from Iran. This is a risk zone: we are not claiming that such a scenario will necessarily materialize," Galstyan said.
According to him, the Board of the Central Bank has considered several channels of influence of the conflict, including through the global economy.
"The confrontation in the Middle East is increasing stagflation risks and the risks of a slowdown in global economic growth, including in the United States. At the same time, the potential for accelerating inflation remains, which is undesirable. A decline in global economic activity will irreversibly affect Armenia's economic growth rate," Galstyan noted.
Galstyan emphasized that weakening external demand could negatively impact the country's economy. Among the risks, he cited a possible reduction in tourist flows, a decline in demand for Armenian goods in Middle Eastern markets, and logistical constraints exports.
He also noted that oil prices directly impact inflation and, through energy costs, have a secondary impact on commodity prices.
"This creates both disinflationary risks associated with declining demand and proinflationary risks from external markets, which could lead to a higher inflation trajectory," Galstyan said.
On February 28, the US and Israel launched strikes against Iran, to which the Islamic Republic responded with a series of massive attacks. The conflict escalated into a full-scale war.
"The Board of the Central Bank of Armenia has attempted to estimate this impact. According to our estimates, the impact could be around 1.2-1.7%. The main factors are rising oil prices, increased import costs due to the use of alternative logistics routes, and the possible substitution of food products imported from Iran. This is a risk zone: we are not claiming that such a scenario will necessarily materialize," Galstyan said.
According to him, the Board of the Central Bank has considered several channels of influence of the conflict, including through the global economy.
"The confrontation in the Middle East is increasing stagflation risks and the risks of a slowdown in global economic growth, including in the United States. At the same time, the potential for accelerating inflation remains, which is undesirable. A decline in global economic activity will irreversibly affect Armenia's economic growth rate," Galstyan noted.
Galstyan emphasized that weakening external demand could negatively impact the country's economy. Among the risks, he cited a possible reduction in tourist flows, a decline in demand for Armenian goods in Middle Eastern markets, and logistical constraints exports.
He also noted that oil prices directly impact inflation and, through energy costs, have a secondary impact on commodity prices.
"This creates both disinflationary risks associated with declining demand and proinflationary risks from external markets, which could lead to a higher inflation trajectory," Galstyan said.
On February 28, the US and Israel launched strikes against Iran, to which the Islamic Republic responded with a series of massive attacks. The conflict escalated into a full-scale war.
