Economic activity in Armenia slowing down, with foreign trade also declining

ArmInfo.  In January-March 2025, Armenia's economic activity growth significantly slowed to 4.1% per annum (from 14.3% in the same period of 2024). Moreover, the industrial sector, which was the main  driver of growth a year earlier, is now experiencing a double-digit decline. 

According to the final data from the RA Statistics Committee, this decline was accompanied by a negative shift in foreign trade, transitioning from several-fold growth to a significant decline. According to statistics, such a sharp slowdown in economic activity growth in January-March 2025 can largely be attributed to the worsening annual dynamics of the industrial sector, which shifted from 30.4% growth to an 18.5% decline and a strong slowdown in the growth of the trade sector, dropping from 26.5% to 6%. Additionally, the service sector managed to accelerate in annual growth increasing  from 5% to 11.5%. Similar improvements were noted in the agricultural sector - from 3.7% to 10.5% and in the construction sector - from 11.7% to 13.6%. The  energy complex also showed noticeable improvement in annual dynamics, shifting from a 1.4% decline to 6.5% growth. 

According to statistics for January-March 2025, the trade sector leads with a volume of 1.3 trillion drams ($3.4 billion). Following closely is the service sector - 865.3 billion drams ($2.2 billion), then the industrial sector - 599.8 billion drams ($1.5 billion), the agricultural sector - 97.5 billion drams ($246.5 million), and the construction sector - 77.6 billion drams ($196.2 million). The volume of power generation in January- March 2025 amounted to 2624.8 million kWh, with 838.6 million kWh w generated in March alone. At the same time, economic activity in March 2025 slowed down compared to March 2024,  with growth at  3.7% (down from 15.3% a year earlier). However, growth in March alone,  accelerated from 5.8% to 11.9%  (compared to a slowdown in growth in March 2024 from 11.3% to 10.4%). Moreover, in March 2025, the dynamics of the industrial sector improved significantly, transitioning from a 0.9% decline to a double-digit 15.9% growth, whereas a year earlier in the same month, growth stalled sharply from 18.9% to a stagnant 0.2%. In March, in addition to the industrial sector, the dynamics of the services sector also improved - moving from a 1.3% decline to 11.5% growth. However, there was a slight slowdown in growth in the construction sector - from 36.8% to 31.9%, and a minimal acceleration in growth in  the trade sector - from 16.6% to 16.9%. And only the energy complex lingered in decline with a slowdown in March from 5.6% to 3.3%. In annual terms (March 2025 to March 2024), all sectors demonstrated an upward trend, except for the industrial sector, which experienced a decline of 16.9%. 

The construction sector and the service sector demonstrated  the highest annual growth - 15.5% and 10.1%, respectively, followed by the trade sector - 3.2%, and the energy complex - 2.1%. In March 2024 compared to March 2023, all sectors experienced growth: the industrial sector - by 33.5%, the trade sector - by 30.4%, the construction sector - by 13.1%, the energy complex - by 8%, and the services sector - by 4.7%.  Armenia's foreign trade turnover in January-March 2025 amounted to 1.8 trillion drams ($4.5 billion), showing a 54.2% decrease compared to the previous year's 2.1-fold increase. This is due to  significant drops in both exports and  imports - by 61.8% and 47.9% per annum, respectively, while last year both indicators showed significant growth - 2.7 times (exports) and 75.8% (imports). As a result, the absolute value of exports for January-March 2025 amounted to 672 billion drams ($1.7 billion), and imports - 1.1 trillion drams ($2.8 billion).

In March 2025, foreign trade turnover decreased by 31.8% compared to  March 2024, due to a decrease in both exports by 65.4% and imports by 51.2%, while a year earlier in March 2024, compared to March 2023, foreign trade turnover showed a significant increase of 2.1 times due to a significant increase in both exports by 3 times and imports by 56.2%.  Note that since 2023, the methodology for calculating the volumes of generated power has changed in statistical reports, particularly, the volumes of power generated by autonomous producers  are now being included. Data for agricultural sector is only  published in quarterly and annual statistical reports. (The average calculated exchange rate of the dram in January-March 2025 was AMD 395.42/$1).