Sanctions imposed on Russia will slow down economic growth in Armenia, Central Bank chairman Martin Galstyan told a press conference on Tuesday, March 15, Sputnik Armenia reports.
The Central Bank has thus lowered its GDP growth forecast for the republic for 2022 from 5.3% to 1.6%, the chairman said. In light of Russia's war in Ukraine, the uncertainty factor in the economy has increased significantly, he added.
Galstyan believes sanctions will mostly impact the industry, while the tourism sector, on the other hand, will expand. Compared to the initial forecast, a decrease in trade and services within Armenia is also expected.
In the light of what Galstyan described as "increased uncertainty", the Central Bank has raised the refinancing rate by 1.25% – from 8% to 9.25%.
The U.S. is banning all Russian oil and gas imports and the UK will phase out Russian oil by the end of 2022. The EU, which gets a quarter of its oil and 40% of its gas from Russia, says it will switch to alternative supplies and make Europe independent from Russian energy "well before 2030". Germany, meanwhile, has put on hold permission for the Nord Stream 2 gas pipeline from Russia to open.
Western countries have also frozen the assets of Russia's central bank, to stop it using its $630bn (£470bn) of foreign currency reserves. Some Russian banks are being removed from the international financial messaging system Swift, which is used to transfer money across borders.
