Russia: Armenia risks over 20% GDP loss if it joins EU

Armenia could lose around 23% of its GDP in the event of joining the European Union, according to statements made by Russian Security Council Deputy Secretary Alexey Shevtsov to journalists.

Shevtsov described Armenian statements about the need to transfer the concession for managing the South Caucasus Railway (SCR) as “strange,” adding that proposed alternatives involving third countries were also questionable, Caliber.Az reports via Russian media.

“At least strange are the statements from the Armenian side that concession management of the SCR allegedly creates certain competitive losses for the republic, and proposals to transfer this concession to third countries,” he said.

He further claimed that Armenia could lose approximately 15.1% of its GDP if it exits the Eurasian Economic Union (EAEU).

“Even by the most conservative estimates, accession to the EU would cost Armenia around 23% of GDP. A reduction in employment by 10.5 percentage points and an increase in inflation by 22.6 percentage points would lead to a noticeable decline in living standards. Domestic consumption could fall by more than 20% of current levels. A further rise in energy prices, including natural gas, is also expected,” Shevtsov stated.

He also warned that potential EU membership and the introduction of visa regimes with Russia and Iran would reduce tourist inflows, negatively affecting the economy. According to him, leaving the EAEU would significantly impact sectors such as metallurgy, beverage production, tobacco, and food industries, with declines reaching up to one-third.

At the same time, he added that other EAEU member states would not experience significant negative effects, with estimated losses limited to fractions of a percent.

By Jeyhun Aghazada