The Armenian economy is currently incurring losses due to the war in Iran, but if the conflict ends soon, the losses are expected to be minimal, Economy Minister Gevorg Papoyan said.

He made the comments during a parliamentary committee hearing when asked about the potential fallout of the war in Iran.

“Currently, we are assessing these risks. We hope the conflict will be short-term. We also hope that our strategic partners and friendly countries involved in the conflict will resolve it. In that case, in our view, the losses will be minimal. There are already some losses, particularly reflected in the rising prices of certain goods. First, we see some inflationary risks. Second, for the organization of certain production processes, Armenia also imports raw materials, and in that case, we may again face similar inflationary risks,” Papoyan said.

Armenia has a fairly large trade turnover with Iran, including both imports and exports. According to the minister, the current situation will not have a positive impact on the Armenian economy in the long term.

“However, if we follow the statements of political leaders at a high level, there seems to be hope that the conflict will end in the near future. We believe that, in that case, there should not be very significant negative outcomes,” he added.

Papoyan’s comments came after Central Bank Governor Martin Galstyan warned on Tuesday that Armenia’s economy cannot remain unaffected by the ongoing military operations in the region, and that the escalation of the situation could lead to an inflation rate of 1.2–1.7% in Armenia.

The U.S. and Israel launched what they described as a pre-emptive strike against Iran on February 28, claiming that Tehran was developing a nuclear weapon and posed a threat—an allegation Iran has denied. In response, Iran launched counterattacks, firing missiles and drones at Israel, as well as at U.S. assets and other targets across the Middle East.