Spillover effects of the Russian-Ukrainian conflict on the Armenian economy: a multiple period approach

Given Armenia’s close economic ties with both Russia and Ukraine, as well as its strategic role as a regional transit hub, the Russia–Ukraine conflict has resulted in notable macroeconomic shifts. Previous studies have largely overlooked how the spillover effects of the conflict evolve over time. Recognizing that the intensity and significance of economic disruptions differ across stages of the conflict, this study addresses that gap by offering a phase-based assessment distinguishing three periods: Initial Shock, Adaptation, and Stabilization. Using regression analysis, the study evaluates the effects of the conflict on key macroeconomic indicators, including inflation, exchange rates, housing and rental prices, re-exports, and the service sector. The regression model incorporates the three identified conflict phases as explanatory dummy variables. The findings indicate that macroeconomic disruptions were most pronounced during the Initial Shock and Adaptation phases. Migration inflows, trade realignments, and shifts in capital flows contributed to exchange rate volatility, inflationary pressures, and rising housing and service costs. By integrating a phase-based analytical approach, the study provides a nuanced understanding of the conflict’s dynamic economic effects and contributes to the broader discourse on the Russia–Ukraine conflict and its regional implications.