Armenia significantly increases foreign trade volumes with many EU countries, rapidly increasing turnover in direction of USA, UAE, Japan, UK and Canada

ArmInfo. Armenia significantly increased the volume of foreign trade with many EU countries - with, Germany, France, Austria, Greece, Denmark, Finland, Poland, Slovakia (2- 3.7-fold), rapidly increasing foreign trade turnover in the direction of the USA, UAE, Japan, Great Britain and Canada (2.2-5.8-fold). This is evidenced by the data of the RA Statistical Committee for January-May 2023.

The UAE, the USA and Germany are consolidating their positions in the TOP-5 in terms of foreign trade with Armenia. In particular, the UAE consolidate its positions thanks to the  multifold growth of exports with a significant increase in the share in the total volume from 5.3% to 16.6%, and the USA and Germany - thanks to the same multifold growth in imports with an increase in the share in total imports from 3.5- 4.2% to 6.2-5.5%. According to statistical data, Russia continues to lead the TOP-5 in terms of foreign trade turnover with Armenia, China holds the second place, the United Arab Emirates occupies the third place, the United States occupies the fourth place, and Germany is in the fifth place, while Iran and Japan are very close to the TOP-5.

Leadership in terms of foreign trade turnover in general, and in terms of exports and imports in particular, continues to be held by Russia. In particular, the foreign trade turnover between Russia and Armenia in Jan-May 2023 exceeded $2.5 billion, with an acceleration of y-o-y growth from 39.2% to 2-fold, due to a surge in exports while an imperceptible slowdown in import growth. Thus, the volume of exports of goods from Armenia to Russia increased 3.3-fold year-on-year, while a modest 32.7% growth was observed in the same period of 2022. At the same time, the upward pace of imports of goods from Russia to Armenia slightly slowed down - from 42.5% to 42%.  Moreover, such a sharp change in the y-o-y dynamics of both exports and imports is explained by the consequences of the unprecedented scale of anti-Russian sanctions applied by the collective West. As a result, the volumes of exports to Russia and imports from Russia amounted to $1.3 billion and $1.2 billion, respectively, in Jan-May 2023. Russia's share in Armenia's foreign trade turnover increased from 31.6% to 34.3% year-on- against the background of a significant increase in the share of exports from 28.3% to 49%, with a decline in the share in imports from 33.4% to 25.8%.

The 2nd place in terms of foreign trade turnover with Armenia continues to be occupied by China, which previously occupied this place both in terms of exports and imports, and now holds it only in terms of imports, and has dropped to 3rd place in terms of exports, having settled down after the United Arab Emirates . Thus, the volume of foreign trade turnover between Armenia and China in Jan-May 2023 amounted to $812.5 million, with an acceleration of y-o-y growth from 25.6% to 49.3%. In particular, the volume of exports of Armenian goods to China turned the dynamics from a 17.8% decline to a 16.7% increase, amounting to 166.3 million (3rd place), while the volume of imports accelerated in growth from 54.5% to 60.9%, amounting to $646.2 million (2nd position). The share of China in the foreign trade turnover of Armenia, decreased from 13.9% to 11.1% year-on-year, against the backdrop of a more noticeable decline in the share in exports from 10.2% to 6.2% than in imports from 15.8% to 13.9%.

The United Arab Emirates has risen to the 3rd place in terms of foreign trade turnover with Armenia, and to the 2nd place in terms of exports. In particular, the volume of foreign trade turnover between Armenia and the UAE in Jan-May 2023 amounted to $465.1 million, with a sharp acceleration in y-o-y growth from 89.5% to 5.2-fold, due to an increase in exports and a double-digit growth in imports. Thus, the volume of exports of Armenian goods to the UAE sharply accelerated in growth from 2.2 -fold to 6-fold, amounting to $445.02 million (2nd place), while the volume of imports accelerated in growth from 9.8% to 26.8%, amounting to $20.1 mln. The share of the UAE in the foreign trade turnover of Armenia increased from 2.3% to 6.3% over the year, due to an increase in the share in exports from 5.3% to 16.6%, while the share in imports decreased from 0.6% to 0.4%.

The USA took the 4th place in terms of the volume of foreign trade with Armenia, and it rose to the 3rd place in terms of the volume of imports. Thus, the volume of foreign trade turnover between Armenia and the United States in Jan-May 2023 exceeded $307.9 million, with a noticeable acceleration in y-o-y growth from 74.1% to 2.4-fold, due to continuous multiple growth of imports, while exports are deteriorating. In particular, the volume of exports of Armenian goods to the United States reversed the y-o-y dynamics from 3% growth towards a 47.2% decline, amounting to $19.6 million, while the volume of imports accelerated growth rates from 2.4-fold to 3.3-fold, exceeding $288.3 million (3rd place). Due to this, the share of the USA in Armenia's foreign trade turnover increased from 3.2% to 4.2% y-o-y, which in turn is due to the increase in the share of imports from 3.5% to 6.2%, while the share of exports decreased  from 2.7% to 0.7%.

Germany remained in the 5th place in terms of foreign trade turnover with Armenia, and in the 4th place in terms of import volume, thanks to the multiple growth, and the dynamics of export worsened falling into recession. Thus, the volume of foreign trade turnover between Armenia and Germany in Jan-May 2023 reached $295 million, with a noticeable acceleration in y-o-y growth from 35.4% to 92.9%. In particular, the volume of exports of Armenian goods to Germany amounted to $39.9 million with a deterioration in y- o-y dynamics from 44.8% growth to 14.2% decline, and the volume of imports of goods from Germany - $255 million (4th position) with a sharp acceleration of y-o-y growth from 31.7% to 2.4-fold. As a result, Germany's share in Armenia's foreign trade turnover remained almost unchanged, moving only from 3.9% to 4% over the year, which was accompanied by an increase in the share in imports from 4.2% to 5.5% and a decline in the share in exports from 3. 4% to 1.5%.

Russia holds the lead in terms of exports and imports, and the next four places in terms of exports were taken as follows - the United Arab Emirates, China, the Netherlands ($142.4 million), and Iraq ($85.6 million), and in terms of imports - China, the USA, Germany and Iran ($23975 million) . Moreover, a 53.1% increase in imports to the Netherlands was accompanied by a slowdown in export growth to 43.2%, and in the direction of Iraq, there was a decline in exports by 2.7%, with an increase in imports by 84.3%, and in the direction of Iran, the dynamics worsened- with a 5.1% decline for exports, and with a slowdown in growth to 19.8% for imports.

Among the TOP-5 countries in terms of foreign trade with Armenia, the balance of three countries remains at a negative level, Russia has entered a positive balance, and the UAE, as before, has a positive balance.  Thus, the negative balance of Armenia's foreign trade with China increased by 85.2% to $479.8 million, with the United States it increased sharply- 5.2-fold to $268.8 million, with Germany it increased 3.6-fold to $215.1 million, and the positive balance of the UAE increased sharply 7.3-fold- up to $424.9 million.  The balance of foreign trade between Armenia and Russia went from the negative level of $451.7 million to the positive o e $117.1 million, as exports, which increased sharply, began to dominate.

In total, Armenia's foreign trade turnover in Jan-May 2023 exceeded $7.3 billion, with an acceleration of y- o-y growth from 36.6% to 86.9%. In particular, an increase in volumes was observed both in exports - by 93.3% to $2.7 billion, and in imports - by 83.3% to $4.6 billion, which was observed at a much more restrained pace in the same period of 2022 - exports by 27.5 % and imports by 42.2%.

The foreign trade turnover of Armenia with the EAEU countries in Jan-May 2023 exceeded $2.6 billion, with an acceleration of y-o-y growth from 39.8% to 2-fold, against the backdrop of a noticeable increase in exports - 3.4-fold (from 33.2% in 2022) - up to $1.4 billion, with a slowdown in import growth to 42.6% (from 43.2% in 2022) to $1.2 billion. And Armenia's foreign trade turnover with the EU countries in Jan- May 2023 accelerated growth from 34.9% to 50.3% , reaching $1.2 billion, due to a sharp acceleration in import growth from 20.9% to 2-fold with a deterioration in export dynamics from 56.6% growth to 12.9% decline, the volumes of which amounted to $870.1 million and $305.5 million, respectively.

As a result, the negative balance of Armenia's foreign trade in Jan-May 2023, having slowed down in y-o-y growth from 99.8% to 71.2%, reached $1.96 billion. In particular, the balance of Armenia's foreign trade with the EAEU countries got out of the negative level of $465 million by positive one of $128.5 million, and with the EU countries the negative balance increased sharply -7-fold- up to $564.6 million, while a year earlier there was a negative balance in both cases with an increase in the EAEU by 53.4% and a decline in the EU by 35.5%.

It should be noted that the Central Bank of Armenia, in its June forecast report for 2023, expects a sharp slowdown in the growth of exports and imports to18.7-22.1% (from actual 77.7-63.5% in 2022), with a subsequent deterioration in dynamics in 2024 to a 2.9-4.5% decline, but already in 2025 with a modest almost identical 4.4-4.6% growth. The Central Bank characterizes this slowdown in the growth of exports and imports in 2023 as a certain stabilization of the pace after an increase in 2022. In terms of service exports, the influx of huge numbers of international visitors is expected to continue. At the same time, high growth in exports of IT services will continue, despite some slowdown in H2 2023. The Central Bank in the same forecast report improved its expectations for GDP growth in 2023 from the previous 5.8% to an updated 6.9% (against the actual 12.6% growth in 2022), followed by a slowdown in 2024 to 5.5 %, but the absolute value of GDP will reach up to 9.5 trillion drams in 2023 (from 8.5 trillion in 2022) with a subsequent achievement of 10.4 trillion drams in 2024.