Russia remains leader in Armenia`s foreign trade

ArmInfo. Russia retains its leading position in Armenia's foreign trade, now supported by imports, whereas a year ago the main driver was exports.

According to the RA Statistical Committee for the first half of 2024, the volume of foreign trade turnover between Armenia and Russia reached $8.4 billion, accelerating in annual growth from 87.3% to 2.5 times, which increased the Russian Federation's share in the total volume from 35.8% to 45.4%.

This was accompanied by an acceleration of import growth from Russia to Armenia from 28.6% to 4.8 times and a deterioration in the dynamics of exports from Armenia to Russia from a 3-fold increase to a 21.1% decline, the absolute value of which amounted to $6.96 billion and $1.4 billion, respectively. As a result, the share of exports to Russia decreased over the year from 52.8% to 17.8%, and the share of imports from Russia jumped from 25.6% to 66.4%. Previously, Russia was the leader in both exports and imports, but now it has managed to retain its leadership only in imports, losing out to the UAE in exports.

And now it is the UAE that occupies the 2nd position in foreign trade with Armenia - $3.69 billion, accelerating in annual growth from 3.3 times to 7.5 times, which increased the UAE's share in the total volume from 5.5% to 20.1%. At the same time, the UAE took the lead in exports - $3.67 billion, accelerating in annual growth from 3.8 times to 7.8 times, while the volume of imports continued to remain far outside the top five - $26.3 million with an imperceptible acceleration in growth from 1% to 5.6%. As a result, the share of exports to the UAE jumped over the year from 13.9% to 46.3%, and the share of imports from the UAE became even more meager, dropping from 0.4% to 0.2%. The UAE's advancement to 2nd position in foreign trade with Armenia pushed China to 3rd - $1.4 billion, with a slowdown in annual growth from 48.8% to 41.9%, which reduced China's share over the year from 11% to 7.6%. This was the result of a reversal in import dynamics from 59.8% growth towards an 11.7% decline - to $693.1 million, with a sharp acceleration in export growth from 17.6% to 3.4 times - to $714.3 million. But despite the deterioration of the import trend, China managed to hold on to 2nd position, but in terms of export, even significant growth did not save it from sliding to 3rd position. As a result, the share of exports to China increased over the year from 6.1% to 9%, and the share of imports from China decreased by 14% to 6.6%.

Iran retained its 4th position in terms of foreign trade turnover with Armenia - $323.1 million, despite the deterioration of the annual dynamics from 11.8% growth to 6.8% decline. In particular, Iran managed to move up from 5th to 3rd position in imports, while occupying 8th position in exports, with both volumes decreasing by 7-5.3% year-on-year - to $270.1 million and $52.9 million, respectively, whereas a year ago, a 16.3% increase in imports was accompanied by a 7.5% decline in exports. Iran's share in Armenia's foreign trade turnover decreased from 3.9% to 1.8%, with a decline in the share of both exports from 1.7% to 0.7%, and imports from 5.2% to 2.6%. The United States has consolidated its position in 5th place in terms of foreign trade turnover with Armenia - $234.04 million, despite the deterioration of the annual dynamics from a 2.5-fold growth to a 40% decline. Moreover, the deterioration of the import dynamics was accompanied by an improvement in the export trend. Thus, exports went from a 47.2% decline to a 21.9% growth, while imports turned from a 3.3-fold growth towards a 43.9% decline, the volumes of which amounted to $28.2 million and $205.8 million, respectively. The share of the United States in Armenia's foreign trade turnover decreased from 4.3% to 1.3%, with a decline in the share of exports from 0.7% to 0.4% and imports from 6.5% to 2%.

So, in terms of export volume, the UAE has become the leader, having displaced Russia to 2nd place and China to 3rd place, while the 4th and 5th positions were taken by Iraq ($87.5 million) and Georgia ($74.1 million). In terms of import, the first two positions are still occupied by Russia and China, Iran has moved up to 3rd place, having displaced the USA to 4th place and Germany to 5th place ($195.9 million).  Moreover, in the direction of Iraq, the deepening decline in exports to 12.7% was accompanied by a deterioration in the dynamics of imports from growth by several times to a significant 91.5% decline, in the direction of Georgia, there was a decline in exports by 2.7% with an increase in imports by 10.6%, and in the direction of Germany, the deepening decline in exports to 34.7% was accompanied by a deterioration in the dynamics of imports from growth by several times to a 35.3% decline. Among the top five leaders in foreign trade with Armenia, two countries have a negative balance, the balance of trade with Russia has also turned from positive to negative, China's balance has reached a positive level, and the UAE, as before, has a positive balance. Thus, the negative balance of Armenia's foreign trade with Russia amounted to $5.5 billion, with Iran - $217.2 million, with the USA - $177.6 million, and the positive balance of the UAE and China amounted to $3.6 billion and $21.2 million, respectively.

In total, Armenia's foreign trade turnover for the first half of 2024 reached $18.4 billion, accelerating in annual growth from 72.9% to 2 times. This was the result of the acceleration of annual growth in exports from 72.8% to 2.3 times and imports from 73% to 86.5%, the volumes of which reached $7.9 billion and $10.5 billion, respectively. With the EAEU countries, Armenia's foreign trade

turnover for the first half of 2024 reached $8.5 billion (46.2% of the total), with an acceleration of annual growth from 86.1% to 2.5 times. This was due to a 4.7-fold jump in imports (from 27.2% in 2023), with a deterioration in export dynamics from a 3-fold growth to a 19.7% decline, the volumes of which amounted to $7 billion and $1.5 billion, respectively. With the EU countries, Armenia's foreign trade turnover for the first half of 2024 amounted to $1.1 billion (5.7% of the total volume), with a deterioration in dynamics from 44.1% growth to 23.7% decline, due to a reversal of the import trend from 87% growth towards a 23.1% decline and a deepening decline in exports from 11.7% to 25.1%, the volumes of which amounted to $777 million and $281.8 million, respectively. As a result, the share of the EAEU in exports decreased over the year from 55.1% to 18.9%, having increased in imports from 26.7% to 66.8%, in both cases due to Russia, while the share of EU countries decreased both in exports from 11.1% to 3.5% and in imports from 18% to 7.4%, mainly due to Germany and the Netherlands.

As a result, the negative balance of Armenia's foreign trade for the first half of 2023, having slowed down in annual growth from 57.1% to 18.2%, reached $2.5 billion. In particular, the balance of Armenia's foreign trade with the EAEU countries fell from positive $362.9 million to negative $5.5 billion, and with the EU countries the negative balance decreased from $634.3 million to $495.2 million. It should be noted that the June forecasts of the IMF, the WB and the Central Bank of Armenia regarding the dynamics of exports and imports for 2024-2025 differ greatly. Thus, according to the CBA forecast, the dynamics of exports and imports, after almost identical growth in 2023 by 28.7-28.3%, will improve imperceptibly in 2024 - to growth of 29.6% (for exports) and 28.6-27.2% (for imports), and in 2025 will turn towards a double-digit decline in exports by 34.4-33.8% and imports by 28.6-30.6%. The IMF already predicts for 2024 that Armenia's exports will enter a decline of 1.4% with an acceleration in 2025 to 10.4%, and predicts a strong slowdown in import growth to 2.8% in 2024 and already in 2025 a decline of 5.4%. The World Bank forecasts a sharp slowdown in export and import growth for Armenia in 2024 to 5.2% and 6.7%, respectively, with a slight acceleration in 2025 to 5.6% and 7%.