Armenia Central Bank Warns of Apocalyptic Gas Price Scenario

The Central Bank of the Republic of Armenia has assessed the potential economic risks associated with a possible increase in Russian gas prices. Governor Martin Galstyan announced on Tuesday that such a price hike could trigger a dual negative effect by driving up overall inflation as energy costs permeate manufacturing and greenhouse production, while simultaneously causing a downturn in economic activity.

Galstyan characterized this possibility as a "Type X" or "apocalyptic scenario," distinguishing it from the bank's baseline outlooks. He noted that such a shock would necessitate a response stronger than the usual monetary policy regime.

Despite these warnings, the Central Bank is currently maintaining its normal course of action. The bank is incorporating these risks into its contingency planning to prepare for potential restrictions on Russian exports or increased energy costs.