Yerevan: Armenia's recent election results, while securing continuity in governance, do not entirely dispel concerns regarding the country's relationships with Azerbaijan and its aspirations for European Union integration.

According to Azeri-Press News Agency, reported by APA-Economics, the ruling party's failure to achieve a supermajority in parliament presents hurdles for constitutional amendments that could facilitate tension reduction with Azerbaijan and advance EU integration efforts.

ING Bank's assessment highlights that despite the ruling party maintaining its parliamentary majority, the absence of a supermajority complicates potential constitutional changes. These amendments are seen as critical for addressing ongoing disputes with Azerbaijan and pursuing closer ties with the EU. The bank also points out that these unresolved issues pose a threat to the stability of the Armenian dram, even as the currency has strengthened due to increased portfolio investments and remittances.

Furthermore, the bank's report notes that a slower pace in Armenia's EU integration process may mitigate the risk of economic countermeasures from Russia. With Russia being a major economic partner, supplying 80% of Armenia's gas imports and accounting for a significant portion of its trade and remittances, a careful balancing act in foreign relations is deemed essential.

ING also expresses uncertainty about the political agenda's ability to yield definitive outcomes for the markets concerning Armenia's future relations with the EU and Russia. The bank forecasts that, in the face of foreign policy uncertainties, the Central Bank of Armenia is likely to maintain its key interest rate at 6.5% next week, given the Armenian dram's strong position and inflation remaining within the expected range of 4-5%.