The board met on 15 September with 12-month inflation at 4.4% in August and core inflation at 4.8%, above the bank's target, chairman Martin Galstyan said, in Armenpress's account at 15:28. He named the risks: regional conflicts widening and weakening demand; investment activity and fiscal worries in the United States raising the risk of higher long-term neutral rates; energy prices staying high; and risks of excess supply on the domestic market because of the restrictions on exports to the Russian Federation. He also pointed to fast growth in imports of finished consumer goods and in retail trade.
The glut has prices attached. At his press conference, News.am reported at 16:06, Galstyan put tomatoes 53% cheaper this year, peaches 57.7% cheaper and apricots 55.8% cheaper, and tied the fall to what he called the Russia phenomenon. If the tension with Russia lasts, he said, Armenian goods will face limits on where they can be sold; investors, he added, are already weighing whether a sector with a closed market is worth entering.
The list is Russia's list.
The bank also prices a gas shock it has not yet had. Asked about a rise in the price of Russian gas, Galstyan said the board considers that scenario and sees 2 effects, a first on the general price level and a second through the cost of everything gas goes into, Armenpress reported at 16:20. Russian gas to Armenia is off for 11 days from Tuesday for repairs on the Russian section, as CAW reported on Monday; Gazprom Armenia is covering the gap from storage and Iranian volumes.
In Strasbourg the same afternoon the European Parliament voted through the Commission's autonomous trade measures for Armenia: 583 in favour, 49 against, 39 abstentions, by News.am's count. The Council had backed the regulation on 2 September. It suspends import duties on a broad range of Armenian products, including selected farm goods under tariff-rate quotas, for 2 years from entry into force, and liberalises about 80% of what Armenia sells to the EU.
The Council's own description of the design is the telling one: the measures cover almost 99% of Armenia's exports of fresh fruit, vegetables and plants to Russia and more than 91% of its beverages and spirits. The list is Russia's list. Ireland's foreign minister, Helen McEntee, said in the Council's release: "when faced with economic coercion, the EU will respond".
Entry into force needs the Council's formal adoption and publication in the Official Journal. Armenia's side of the bargain is rules of origin, administrative cooperation with the EU, no new restrictions on EU imports and respect for the partnership agreement's clauses on democracy and rights; the EU keeps a safeguard if its own producers are hurt.
Yerevan lodged a complaint against Russia's produce bans through the Eurasian Economic Union on 8 September, and the Kremlin's invitation to Moscow for Pashinyan is still without a date.
The bank's statement is an official ledger of the bans' price: a glut that halves the price of a tomato and a rate that rises anyway, on demand the same statement sees in imports of finished goods and in retail. Brussels sized its window against 2 bases at once, 80% of Armenia's exports to the EU and 99% of the fruit and vegetables Armenia sent to Russia. The second number is the design: a product-by-product replacement of one market with another, on a 2-year clock.
Not on the record: the share of Armenia's exports that went to Russia this year; the day the regulation takes effect.