“According to our expert estimates, in terms of sensitivity, if gas prices rise by 10%, our inflation will be approximately 0.8% higher,” Galstyan said at a press conference on Tuesday, answering ARKA’s question about the possible impact of a sharp gas price increase on inflation and economic growth in Armenia in 2027, as well as the need for further tightening of monetary policy. According to him, the Central Bank does not yet have a specific gas price scenario, as developing one requires clear parameters, including the magnitude of the price change, the direction of impact, and monetary policy instruments.
“We still don’t have such information, so I think it’s premature to develop any scenario on this matter. Therefore, we simply conducted a sensitivity analysis,” Galstyan explained.
The head of the Central Bank noted that a possible increase in gas prices would have both a direct and indirect impact on the consumer price index.
Specifically, he stated that if gas prices for consumers rise by 10%, the direct impact on inflation, taking into account the prices of liquefied natural gas and the gas component in electricity costs, is estimated at approximately 0.6%.
Furthermore, the increase in prices for end products of related industries that use gas in production could additionally reach 0.1-0.2%.
Galstyan emphasized that the relationship between the magnitude of the gas price increase and its impact on inflation will not necessarily be linear. “With a 10%, 20%, 30%, or 40% increase, this relationship will not necessarily continue in a straight line. And how exactly the situation develops will depend on the scenario that unfolds,” the head of the Central Bank noted.
The day before, Galstyan stated in parliament that the Central Bank of Armenia’s “apocalyptic” scenario is not tied exclusively to a possible increase in gas prices, but rather covers a range of unlikely events that could have a significant impact on the economy.
Galstyan’s previous statement about an “apocalyptic” scenario in the event of a sharp increase in Russian gas prices caused a widespread stir. The reason for this was scenario calculations that project a possible 69% increase in gas prices for Armenia—from $177.5 to $300 per thousand cubic meters. Prime Minister Nikol Pashinyan stated that even such a price increase would not lead to an “apocalypse” for the country’s economy. However, Armenia has received no official indication of an upcoming increase in Russian gas prices.
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