Export "bubble" bursts: Armenia’s trade plummets by 40% Expert exposes gold-driven growth as illusion

Armenia’s export growth has proven to be unsustainable, with indicators continuing to decline, according to economist Aghasi Tavadyan.

Speaking to Armenian media, he highlighted that the country’s foreign trade turnover in January 2025 had fallen by 40% compared to the same period in the previous year, per Caliber.Az.

Tavadyan noted that while Armenia’s overall export growth in 2024 was around 50%, a closer look at the figures for the last two to three months reveals that exports have more than halved compared to the same period in 2023. He explained that this surge was primarily driven by the re-export of gold, which accounted for approximately 65% of Armenia’s total exports in 2024. This heavy reliance on gold re-exports, he said, painted a misleading picture of the country’s economic strength.

At the same time, Armenia’s exports to the Eurasian Economic Union (EAEU) declined by 11% in 2024, while exports to the European Union dropped by 14%. Instead, a significant portion of Armenia’s foreign trade was linked to gold imports, with the country importing $1.5 billion worth of gold in March 2024 alone. However, by the end of the year, this volume had fallen by more than five times, contributing to an overall decline in foreign trade figures.

Tavadyan pointed out that if Armenia’s total exports amounted to $13 billion in 2024, with 65% of that figure coming from gold, then due to the decline in gold re-exports, total exports in 2025 are expected to drop to approximately $9 billion. He emphasized that this downward trend in exports would persist, eventually revealing the true state of Armenia’s economy.

Beyond exports, other key economic indicators also registered a decline in January 2025, leading to a slowdown in economic activity, which fell to 7.1%. According to Tavadyan, industrial production was a major factor in this indicator, having shown double-digit growth since mid-2023 due to gold re-exports. This artificially inflated industrial production figures and contributed significantly to Armenia’s reported economic growth.

Tavadyan described the situation as a “gold re-export industry,” where gold entered Armenia and was exported without any processing. Since these transactions were categorized under industrial production, they significantly boosted the industry’s output figures. However, with this trade chain now largely inactive, he warned that both exports and overall economic growth would decline in 2025.

Looking ahead, the economist identified additional risks that could negatively impact Armenia’s economy, including currency fluctuations, external economic pressures, and domestic challenges. He warned that these factors could lead to a worse-than-expected economic outlook for the year and suggested that the government may be forced to revise the state budget again in 2025.

Earlier, the European Bank for Reconstruction and Development (EBRD) reported that Armenia’s economic growth was returning to normal levels following a sharp increase in 2022-2023. The slowdown is attributed to a decrease in the inflow of Russian IT specialists, which had previously driven economic expansion. Meanwhile, the International Monetary Fund (IMF) projected a decline in Armenia’s GDP growth, estimating it at 6% for 2024 and 5% for 2025, with inflation expected to remain below the Central Bank’s target of 3% ±1%.

By Tamilla Hasanova