Armenia’s trade with Russia has significant impact on overall picture

Once a driving force of Armenia’s economic growth, foreign trade has long been in decline. As of October 2024, the growth rate of foreign trade turnover stood at 12.9 percent. But what do we see today?

According to official statistics, in October of this year foreign trade turnover fell by 16% compared to October 2024. Exports dropped by 21.8%, while imports decreased by 11.9%.

The reason behind such negative figures is well known: the re-export factor no longer exists. In this sense, it should be noted that the pace of decline has somewhat slowed, which means we are in a process of recovery. However, the recovery of exports is much slower than that of imports, which in turn points to problems with Armenia’s export potential.

Another important factor is the structure of foreign trade, directly linked to the widely discussed issue of diversifying our trade flows. What do we see in this area?

37.2% of Armenia’s foreign trade is with CIS countries, including 36.6% with the EAEU as a whole. Of this, 34.6% is trade with Russia alone. The EU accounts for 12% of total trade, while other countries—whose list is quite long—make up 50.6%.

One way or another, Russia remains Armenia’s single major trading partner. At first glance, however, when comparing statistical data, it may seem that there is some weakening of this dependence and a certain diversification. What is the reason, and is this really the case?

As of October 2024, Russia’s share in Armenia’s foreign trade turnover was 41.6%, while the EU’s share was 7.3%. Today, Russia’s share is 34.6%, and the EU’s is 12%. This picture may create the impression of some diversification.

Perhaps the image of dependence on Russia has softened somewhat, but it is still too early to speak of diversification. Unfortunately so, because other reliable and secure directions are extremely necessary for Armenia.

The problem is that Russia’s share has fallen significantly, while the EU’s increase has been far smaller. Moreover, overall trade volumes have shrunk due to reduced trade with Russia. In other words, Armenia’s trade with Russia has declined, but trade with others has not grown.

Thus, even today, changes in Armenia’s trade with Russia continue to have a significant impact on the overall picture.