WASHINGTON, DC — The World Bank has warned that if Russia con- tinues and expands restrictions on imports of Armenian agricultural and food products, the effects could extend beyond trade and negatively affect Ar- menia’s economic growth, inflation and social conditions. The warning appears in the World Bank’s Armenia Monthly Economic Update: July 2026. According to the report, although Armenia’s economy continues to grow faster than expected, recent political developments involving Russia have created new risks for Armenian ex- ports. “Since late April, Russia has grad- ually expanded restrictions on imports of Armenian agricultural and food products. If these restrictions persist and broaden without mitigating mea- sures, the negative effects could spread beyond trade and affect economic growth, prices and social conditions,” the World Bank said. The bank noted that the Armenian government has already begun sup- porting exporters to mitigate the po- tential impact. The government has in- troduced assistance programs designed to reimburse part of the transportation and customs costs associated with ex- porting to alternative markets, includ- ing the European Union. The World Bank also reported that Armenia’s exports to Russia have al- ready begun to decline. In May, ex- ports to Russia fell by 15 percent com- pared with the same month last year. During the January-May period, Ar- menia’s total exports declined by 3.7 percent, while imports increased by 2.2 percent. As a result, the trade deficit wid- ened and is projected to reach approxi- mately 7 percent of annual gross do- mestic product. At the same time, the bank noted that, excluding the re-export of pre- cious and semi-precious stones, Ar- menian exports continued to increase, driven primarily by the mining sector. Despite external risks, Armenia’s economy continues to expand rapidly. Economic activity grew by 11.7 per- cent in May and by 8 percent during the first five months of the year, ex- ceeding earlier forecasts. Growth was driven mainly by the services sector, tourism, information technology, construction and mining. Meanwhile, annual inflation ac- celerated to 5.1 percent in June, pri- marily because of higher food prices. The Central Bank of Armenia kept its refinancing rate unchanged at 6.5 per- cent in June, taking into account both elevated inflationary pressures and the risks associated with difficulties in ex- porting goods to Russia.