YEREVAN, April 8, ARKA. Events unfolding around Iran are expected to cause an increase in inflation in Armenia by 1.2-1.7 percentage points, stated Armen Nurbekyan, Deputy Governor of the Central Bank of Armenia (CBA). He outlined three main reasons for this anticipated economic impact during the “Uniting Platforms and Economies” Doing Digital 2026 forum.
Three Key Factors Driving Inflation
Nurbekyan identified the primary reasons for the projected inflation increase:
- Rising Oil Prices: “The first reason, essentially, is the increase in oil prices, and we are an oil-importing country,” Nurbekyan explained. As Armenia relies on imported oil, global price fluctuations directly affect domestic costs.
- Need for Alternative Import Routes: “The second reason is the necessity to use alternative import routes, which will increase costs,” he added. Geopolitical tensions or disruptions in traditional trade routes often necessitate longer, more expensive alternatives, leading to higher import costs.
- Substitution Effect: The third factor cited was “substitution.” This refers to consumers or businesses opting for more expensive alternative goods or services when their preferred, often cheaper, options become unavailable or too costly due to external factors.
CBA’s Stance and Future Monetary Policy
Nurbekyan noted that Armenia was in a favorable position regarding its initial inflation level. “Therefore, we hope that this situation can be managed,” he stated. He emphasized that the Central Bank would closely monitor developments, and future monetary policy decisions would depend on how the situation evolves.
The state budget of Armenia for 2026 has set an inflation target of 3% (+-1%). In March of the current year, inflation reached 4.5%. According to the CBA’s monetary policy report for the first quarter of the current year, inflation in Armenia is expected to be between 4.4-3.3% by the end of 2026, depending on the scenario (A-B). Projections for 2027 are 3.5-3.1%, and for 2028, 3.2-3.1%.
Broader Economic Context and Related News
The announcement comes amidst a period of significant economic activity and discussion in Armenia. Recent reports from ARKA news agency highlight various financial developments:
- Banking Sector Growth: The net loan portfolio of Armenian banks increased by 29.89% to 7.2 trillion drams in Q3 2025 compared to the same quarter in 2024. The loan portfolio also grew by 6.11% in Q2 2025, reaching 6.8 trillion drams.
- Bank Profitability Ratings: ARKA agency published rankings of the most profitable commercial banks in Armenia based on Q2 and Q3 2025 results.
- Moody’s Rating Upgrade: Moody’s Ratings upgraded Converse Bank’s long-term bank deposit ratings in national and foreign currencies from B1 to Ba3.
- Financial Literacy Initiatives: IDBank and Idram conducted a financial literacy course for children in the Lori region.
- New Banking Agreements: Akba Bank and American Interactive Brokers signed an agreement making Interactive Brokers’ services available in Armenia through Akba Bank.
- IDBank Promotions: IDBank launched an “All Airlines” campaign, offering up to 25% idcoin for air ticket purchases with premium cards until June 30, 2026.
- Technical Issues: ArmenianCard, the national payment card, reported technical malfunctions.
- Risk Premium at Historic Low: The risk premium in Armenia remains stable, indicating that capital outflow observed in developing markets has not been recorded in Armenia, according to the CBA Deputy Governor.
- CBA Discussions with IMF: The CBA President held a final meeting with the IMF mission to discuss the implementation of structural benchmarks set by the IMF.
- ADB Engagement: Deputy Prime Minister Mher Grigoryan emphasized the Asian Development Bank’s (ADB) involvement in key projects for Armenia during a meeting with ADB Regional Director Lea Gutierrez.
- Capital Market Development: Regular disclosure of information by issuers is considered a key condition for the further deepening of Armenia’s capital market. Experts also emphasize the need for a mature regulatory and infrastructural environment, not just technology, for the capital market’s development.
These developments underscore a dynamic financial landscape in Armenia, where both internal growth and external shocks play a significant role in shaping economic forecasts.
Source: https://armbanks.am/hy/2026/04/08/271999/
