Be Prepared for the Worst: Armenia's Economic Budget Will Suffer Major Losses, Economist

Armenia's economic budget is set to suffer major losses due to the sanctions imposed by the West on Russia, prompting the need to prepare for the worst. Economist Suren Pasyan made this statement in an interview with Factinfo.

According to him, the global economy is heading for serious shocks as a result of the Russian-Ukrainian conflict, and all countries, including Armenia, will be adversely affected.

"Since 2010, Armenia has been a member of the EEU, with Russia being the main player. Additionally, Russia is our number one partner in economic terms, with our exports to Russia amounting to 845 million dollars annually, while we import goods worth 1.9 billion dollars. This means that around 28% of Armenia's exports go to Russia," said the expert.

Suren Pasyan predicts that the Russian economy will be significantly impacted by Western sanctions, which will directly affect Armenia's economy in a negative way.

"We may not feel this impact in the next two months, but we will feel it by the end of the year, considering that the development of the Russian economy will slow down. The remittances coming to Armenia from Russia may decrease by about 30-40% due to the sanctions. Moreover, the quality of these remittances will also decline. If previously 1,000 rubles were sent from there to a family in Armenia, that equated to 7,200 drams, now 1,000 rubles is only 3,000 drams. This means that the standard of living for families receiving money from abroad will significantly reduce. There are Russian companies that have subsidiaries in Armenia, and these companies may also face sanctions, which could result in job losses and a decrease in the state budget," the economist noted.

He suggested that efforts should be made to mitigate losses, while also looking to position Armenia to benefit from any opportunities. "For example, there may be a chance in tourism; currently, there are visa restrictions for Russian citizens. We can create conditions for them to visit Armenia. There are opportunities, but they are limited," Suren Pasyan added.