Media: Armenia’s export indicators remain in deep decline

The Luys Foundation has published an analysis of Armenia’s socio-economic development for the first half of 2025, highlighting a mixed economic picture marked by some economic growth, plummeting exports, and troubling budget trends.

According to the report, Armenia’s Economic Activity Index (EAI) began gaining momentum in May 2025 after a slow start to the year, largely due to a favourable base effect. Although there was a slight deceleration in June compared to May, overall growth remained on an upward trajectory. The cumulative EAI for January–June rose to 6.3 per cent, compared to 5.7 per cent recorded in the January–May period. This improvement was driven mainly by a slower pace of decline in the industrial sector, Caliber.Az reports via Armenian media. 

Despite the uptick in domestic activity, Armenia's export performance continues to lag. While the rate of decline in exports has somewhat moderated, it still reflects a steep contraction. Exports fell by 52.8 per cent in the January–June period. The sharp drop is primarily attributed to the cessation of gold re-exports. Even after adjusting for this one-off factor, export growth stood at a mere 1.1 per cent, pointing to an erosion of the country’s export capacity in recent years.

On the fiscal side, the government’s budget execution fell short of expectations. Although revenues surpassed projections, spending was significantly below target, with expenditures under-executed by 240.2 billion drams ($600 million), or 14.0%. A major portion of this shortfall — about 101.7 billion drams ($254 million) — came from capital expenditures.

The report warns that this trend marks a deviation from the government’s previously stated commitment to infrastructure development. Chronic under-execution of capital spending — amounting to 25.6% in the first half of 2025 — could severely hamper efforts to modernise vital infrastructure, thereby slowing economic development and weakening long-term growth potential.

Despite repeated concerns raised in past years, no significant measures have been implemented to resolve the issue, the Foundation notes.

By Sabina Mammadli