Continued Russian Trade Restrictions Could Affect Armenia’s Social and Economic Conditions, World Bank Warns

WASHINGTON, DC — The World Bank has warned that if Russia continues and expands restrictions on imports of Armenian agricultural and food products, the effects could extend beyond trade and negatively affect Armenia’s economic growth, inflation and social conditions.

The warning appears in the World Bank’s Armenia Monthly Economic Update: July 2026.

According to the report, although Armenia’s economy continues to grow faster than expected, recent political developments involving Russia have created new risks for Armenian exports.

“Since late April, Russia has gradually expanded restrictions on imports of Armenian agricultural and food products. If these restrictions persist and broaden without mitigating measures, the negative effects could spread beyond trade and affect economic growth, prices and social conditions,” the World Bank said.

The bank noted that the Armenian government has already begun supporting exporters to mitigate the potential impact. The government has introduced assistance programs designed to reimburse part of the transportation and customs costs associated with exporting to alternative markets, including the European Union.

The World Bank also reported that Armenia’s exports to Russia have already begun to decline. In May, exports to Russia fell by 15 percent compared with the same month last year. During the January-May period, Armenia’s total exports declined by 3.7 percent, while imports increased by 2.2 percent.

As a result, the trade deficit widened and is projected to reach approximately 7 percent of annual gross domestic product.

At the same time, the bank noted that, excluding the re-export of precious and semi-precious stones, Armenian exports continued to increase, driven primarily by the mining sector.

Despite external risks, Armenia’s economy continues to expand rapidly. Economic activity grew by 11.7 percent in May and by 8 percent during the first five months of the year, exceeding earlier forecasts.

Growth was driven mainly by the services sector, tourism, information technology, construction and mining.

Meanwhile, annual inflation accelerated to 5.1 percent in June, primarily because of higher food prices. The Central Bank of Armenia kept its refinancing rate unchanged at 6.5 percent in June, taking into account both elevated inflationary pressures and the risks associated with difficulties in exporting goods to Russia.