Armenian authorities’ belated revelation on re-exports

Armenia’s industry is experiencing a decline, with both mining and manufacturing sectors showing negative results. For example, the manufacturing industry recorded a 23.5% decline in the current period.

In January-April of the current year, compared to the same period in 2024, the total industry decreased by 16.1%. At the same time, mining saw a 6.8% drop, while manufacturing, as mentioned above, declined by 23.5%.

The decline in manufacturing was largely due to a more than 70% drop in production of non-ferrous metals and jewelry, which is not coincidental: the factor of gold re-export was neutralized. Food production provided 5.1% growth, but this is due to a low base in previous years.

So, Armenia’s economic core—the sectors driving exports—in the current period shows a rather alarming picture. While entertainment, trade, and illogically growing construction provide some statistics, an economy without an industrial base is like a house built without a foundation. Finally, what are the causes of the downturn?

The problem is that there was a great need to support export sectors, especially during periods of external positive shocks. The appreciation of the dram has further burdened this sector. However, such a policy was not implemented or implemented ineffectively, leading to declines in key export categories such as food, beverages, and leather products.

Among other things, the logic of the government propaganda has recently changed, particularly with regard to the re-export factor. In the past, when the impacts of re-exports were positive, the government was reluctant to recognize economic growth from re-exports, but today, when they have a negative impact on various sectors of the economy, it claims that neither positive nor negative growth of these factors is of particular importance for the economy.

The authorities are frank, but it is a belated frankness, tantamount to an admission of manipulating independent processes for propaganda purposes—propaganda speculations, under the influence of which we were during the previous years.