Armenia’s general election result signals broad policy continuity, possibly reinforcing the country’s westward geopolitical trajectory and likely supporting further progress in the Armenia-Azerbaijan peace process, Fitch Ratings says. However, its high exposure to Russia and its reliance on Russian energy remains a significant economic vulnerability.“Armenia stands to benefit from the peace process and potential normalisation of relations with Turkiye, including the reopening of the land border. This process began with a framework agreement in August 2025 and continued with the TRIPP agreement signed on 4 June this year, and would help integrate Armenia’s landlocked economy into a corridor connecting central Asia, the south Caucasus, Turkiye and Europe.This reorientation could unlock meaningful trade and transit revenue, and could strengthen medium-term growth prospects. Growth has moderated, partly due to the impact of the US-Iran conflict, but remained resilient at 4.0% yoy in 1Q26, following 7.2% in 2025. Inflation edged up to 5.3% in April before easing to 4.2% in May, suggesting price pressures are broadly contained.Economic risks relate to Armenia’s close links with Russia, which remains its largest single trade partner, accounting for 35% of total goods exports in 2025. Russia already imposed import restrictions on selected Armenian food products in the lead-up to the elections and has officially threatened to end Armenian purchases of Russian oil, gas and rough diamonds free of export duties and on vastly preferential terms if the country continues its path towards an EU accession process.Natural gas provides 61% of Armenia’s energy needs and 85%-90% of the country’s natural gas imports come from Russia under a long-term fixed-price contract. Unilateral termination of the preferential agreement could materially increase energy costs and negatively affect macroeconomic performance, as well as fiscal and external balances”, Fitch says. Tweet Views 1164