Armenia’s high economic activity is still unstable – Alpha Economics

In 2025, Armenia recorded strong economic activity, with cumulative growth reaching 9.1 percent. What explains this surge in activity?

First, let us note that cumulative growth in industry in 2025 amounted to 4.7 percent, while in agriculture it was 5.6 percent. The latter is quite encouraging, considering the problematic state of the sector in recent years. However, time is needed to understand whether this agricultural growth reflects temporary factors or a genuine recovery.

The largest growth was seen in construction and services—20.2 percent and 10.5 percent, respectively. Meanwhile, foreign trade turnover continued to show negative cumulative growth. As we can see, economic activity and individual sectors accelerated, especially toward the end of the year. Notably, industry showed acceleration. What factors contributed to this?

Industry recovered in the last months of the year. However, it should be noted that this was significantly driven by the increase in basic metals production at the end of the year (up 30.3 percent compared to October 2025, and 2.9 times compared to November 2024), which means we are once again under the influence of re-exports.

Incidentally, this also explains why, despite the ongoing decline in cumulative foreign trade, December saw a 9.4 percent increase in trade compared to November, with exports rising by 13.9 percent. What is the connection between this and industrial growth? The link, it seems, is again the impact of re-exports, which at year’s end also influenced foreign trade turnover statistics.

In summary, Armenia’s high economic activity is still significantly dependent on external and temporary factors, and therefore remains unstable.