World Bank: Restriction on dairy product exports to Russia is a serious risk for Armenia

The gradual expansion of restrictions by Russia could go beyond pure trade and negatively affect overall economic growth, inflation, and the social situation in Armenia, according to the World Bank (WB).

At a press conference held in Yerevan, World Bank representatives presented the annual report “Economic Pulse of Armenia.”

In the context of export risks, the World Bank drew attention to the fact that Russia's restrictions on Armenian agricultural products seriously affect export volumes, which decreased by 15% to the Russian Federation in May.

They noted that as a result of the restrictions imposed by Rosselkhoznadzor on the import of dairy products from Armenia starting July 27, the lion's share of all exports in this segment is at risk, since 78.3% of it went specifically to the Russian market.

“Since thousands of private farmers are engaged in the production of agricultural products and milk, the halt in exports directly hits their incomes. The Bank predicts that this could lead to fluctuations in prices on the domestic market,” World Bank representatives stated.

The Bank also touched on poverty and employment indicators in the country, emphasizing that although the poverty level has decreased, many households are close to this line and vulnerable to any economic shocks.

“The problem is not the lack of jobs, but their low productivity and low wages,” the Bank emphasized.

The World Bank noted that the concentration of large stores and retail chains in Armenia is extremely high (4 large companies dominate 90% of the market), which does not allow for the formation of fair prices.

Source: Sputnik Armenia