The Armenian government is analyzing the global and regional economic trends influenced by the falling oil prices and the tumbling Russian ruble in order to send “correct signals” to local manufacturers and exporters, an Economy Ministry spokesperson said on Monday.
Talking to RFE/RL’s Armenian Service (Azatutyun.am), Anna Ohanian said that changes taking place in Russia cannot but have an effect on the Armenian economy, which is a member of the Russian-led Eurasian Economic Union, a post-Soviet trade bloc also including Belarus, Kazakhstan and Kyrgyzstan.
“The Russian Federation is one of our main trading partners. The Eurasian Economic Union, and Russia in particular, are a market for a considerable amount of our exports. Naturally, changes taking place there cannot but have an effect on our economy. Other things being equal, a depreciating ruble may have an impact on the competitiveness of Armenian manufacturers as compared to other main producers,” she said.
Armenia’s Central Bank issued a statement on Monday, saying that it is “closely following the world economic developments influenced by [the outbreak of] the new coronavirus.”
“According to current estimations, it is expected that these influences on the global economy and the economy of Armenia will be of a short-term nature,” it added.
Ohanian said that under the current circumstances “everything depends on how short-term or long-term these changes are.”
“In such situations short-term estimations cannot reflect all aspects of the situation, and therefore we are conducting a comprehensive analysis of the situation in order to send correct signals to our manufacturers and exports. Obviously, the developments of these days once again underscore the importance of diversifying the export markets for our goods,” the Economy Ministry spokeswoman said.
The Russian ruble fell to a four-year low on March 9 after oil prices collapsed following a breakup of talks between OPEC leader Saudi Arabia and Moscow.
The ruble tumbled today by more than 7 percent to nearly 74 to the U.S. dollar, its weakest rate since early 2016.
Meanwhile, the benchmark Brent oil futures were down 25 percent, at $33.89 a barrel, as concerns of an oversupply in the market resurfaced after the so-called OPEC+ grouping, which includes Russia and Kazakhstan, failed to reach an agreement in Vienna last week on extending output cuts to bolster prices.
Russia is one of the key trade and economic partners of Armenia. According to Armenia’s Statistics Committee, the Russian market accounted for nearly 28 percent of Armenia’s exports (worth over $730 million in absolute terms) in 2019.
Economist Haykaz Fanian believes that if negative trends persist in the Russian economy, it may also take its toll on Armenian companies linked to the Russian market.
“If it lasts long, undoubtedly, companies of our processing industry, for which Russia is the main export market, will be considerably affected in terms of their competitiveness on the Russian market,” said the expert, explaining that in conditions of a depreciating ruble the cost of Armenian goods on the Russian market will also rise.
Another factor, according to Fanian, may also be the decreasing purchasing power of the population in Russia. “It may also affect our exporters,” the economist said.