Re-exporting and re-importing of diamonds and gold haven`t been successful, resulting in a decline in Armenia`s foreign trade turnover

ArmInfo.  In Armenia's foreign trade, transactions involving precious metals and stones have seen a decline since 2025, totaling 21.6% ($967.6 million)  in the first quarter, compared to 66.1% ($6.5 billion) a year earlier. This category of goods has been the main factor contributing to the deterioration in the annual dynamics of the country's foreign trade turnover, which dropped from 212% growth to a 54.2% decline. According to the RA Statistical Committee, in the first quarter of 2025, the share of imports and exports of precious metals and stones in the total trade turnover decreased to 15.7% and 31.3%,  respectively, compared to 59.4% and 74.2% in the same period last year.

During the reporting period, these products were imported for $435.9 million and exported for $531.7 million in terms of volume: over the year, their imports fell by 86.2%, and exports - by 83.9%.  For comparison, it is worth noting that a significant increase in this particular product category began to emerge as a dominant force in Armenia's foreign trade  in 2022. This growth accelerated noticeably in the following two years. In 2022, precious metals/stones and products made from them were exported for $989.3 million (with an annual growth of 3 times), and imported for $690.8 million (with an annual growth of 2.8 times). In 2023, the trend of significant growth  in exports and imports of precious metals/stones and related products  continued, with exports reaching up to $3.2 billion and  imports  up to $2.3 billion, a 3.2- 3.3 times increase. This trend continued in 2024, with impressive growth in exports and imports, despite a slight  slowdown.  By the beginning of 2025, the volume of transactions with precious metals/stones began to decline rapidly, which led to a significant decline in the annual dynamics of export and import volumes (from a 2.7-fold increase and 75.8% in Q1 2024 to a 61.8-47.9% decline in Q1 2025). 

At the same time, production volumes in the jewelry industry continue to remain very modest: for 2022 - 42 billion drams (a 51.8% increase), for 2023 - 230.9 billion drams (a jump of 4.9 times), and for 2024 - 53.2 billion drams or $135.4 million (a 32.2% decline).  The downward trend continued in 2025 with a 75.3% decrease in the first quarter to 4.8 billion drams, which was already observed at a much modest pace a year ago during the same period (a decline of 4.8%  to 15.9 billion drams). According to ArmInfo experts, the dominance of precious metals and stones  in exports and imports three years ago,  coupled with low production volumes in the jewelry industry, indicated a rise in re-exports and re-imports. This trend continued into 2024.

Since 2025, conducting such transactions in the previous volumes has become impossible due to the settlement of the issue of customs duties on jewelry within the EAEU. It is known that since 2020, the Russian Federation has proposed to the EEC more than three times to zero out the import customs value of colored precious stones and small-sized diamonds up to 0.2 carats. However, the issue has not been resolved as Armenia blocked the zeroing of duties. Due to the  import customs duty on precious stones, it was much more profitable to import finished jewelry from third countries that are not members of the EAEU than to produce it within the union. The import duty rate on finished jewelry is lower than the rates on precious stones (10-15%) for its production.

 However, since 2025, this "high-yield" effect has been lost. Russia has eliminated duties on the import of jewelry from the UAE. The actual volumes of re-export and re-import of precious metals and stones are supported by customs data from Armenia, according to which in the first half of 2024, diamonds and gold imported were mainly imported from Russia (77% and 99.7%, respectively) and then exported  to the UAE (77% diamonds and 64% gold) and Hong Kong (17% diamonds  and 25% gold). A similar trend was seen at the end of 2023, but then 46.7% of diamonds and 99.2% of gold came from Russia, which were also exported to the UAE (84.6% diamonds and 71.4% gold) and Hong Kong (2.7% diamonds and 25.4% gold).  According to statistics, despite a significant drop in transactions with precious metals and stones, this sector still retains its leadership in exports, but has lost its top spot in imports. It is worth noting that the previously traditionally dominant export and import items - mineral products and finished food products, having lost their positions to precious metals and machinery, equipment and mechanisms, are still unable to reclaim their leadership in foreign trade.

 The duration of the emerging decline in transactions with precious metals and stones suggests that in the short term, mineral products and finished food products will regain their positions. Specifically, regarding the export and import of mineral products, there was a weakening of growth rates in 2022, entering a decline of 13.6-6.9% in 2023. However, in 2024, both exports (by 15.1%) and imports (by 0.3%)  were able to grow. In the first quarter of 2025, multidirectional  dynamics began to be observed again - a 0.1% decline in imports and a 3.2% increase in exports to $310.9 million and $220.4 million, respectively. This indicates a deterioration in import dynamics (from 5.5% growth) and a slowdown in export growth (from 9.8%) compared to the previous year. This shift placed mineral products in exports to 4th position (now behind not only precious metals and stones, but also machinery/equipment and finished food products). At the same  time, mineral products maintained the 3rd position in imports,  following the leading "machinery, equipment and mechanisms" and "precious metals and stones" which slipped to the 2nd position.

In the first quarter of 2025, exports of machinery, equipment and mechanisms exceeded $331.4 million, while imports amounted to $615.4 million. The annual trend for these indicators worsened: with exports shifting from a 35.5% growth to a 5.5% decline and imports from an 8.8% growth to a 2.5% decline.  Machinery, equipment and mechanisms  took the lead in imports, as the previously leading precious  metals/stones dropped significantly in volume, and in exports they remained in 2nd position, slightly behind in volume. The exports and imports of finished food products improved in annual dynamics, with exports recovering from a 7% decline to a 35.4% growth, and imports with a pronounced acceleration of growth from 1.7% to 36%, reaching $255.8 million (3rd position) and $166 million (5th position), respectively. In total,  exports in the first quarter of 2025 amounted to $1.7 billion, with an annual decline of 61.8% compared to a 2.7-fold growth, and  imports amounted to $2.8 billion,  with a decrease in annual dynamics from a 75.8% growth to a 47.9% decline. 

As a result, the volume of foreign trade turnover fell by 54.2%  year-on-year (against a 2.1-fold increase a year ago), amounting to $4.5 billion in Q1 2025. Moreover, in the country breakdown, a significant decrease in the annual dynamics of foreign trade turnover is recorded for the leading countries: Russia (from a 2.4-fold increase to a 63.8% decline), the UAE (from a 6.9-fold increase to a 78.8% decline), and China (from a 96% increase to a 33.3% decline). Specifically, imports from the Russian Federation fell by 75.6% and exports dropped by 6.8%l. IN the case of the UAE, a 79.5% decline in  exports was accompanied by a 52% increase in imports. As for China, a 80.3% decline in exports was accompanied by a 42.8% increase in imports. It is noteworthy that the foreign trade turnover between Armenia and the EU is showing signs of growth with a reversal in the annual dynamics from a 27.1% decline towards 0.1% growth, exceeding $494.7 million in the first quarter of 2025. This can be attributed to the improvement in the annual dynamics of exports with an exit from a 31.6% decline to 3.5% growth and a strong slowdown in the  decline in imports from 25.3% to 1.1%, the volumes of which amounted to $131.2 million and $363.5 million, respectively. 

At the same time, the foreign trade turnover between Armenia and the EAEU worsened in annual dynamics, going  from a 2.4-fold growth to a 63% decline, amounting to $1.6 billion in the first quarter of 2025. The significant decline in imports by 75.3% (against a 3.9-fold growth a year ago) and an imperceptible slowdown a decline in exports from 7.4% to 6.8% contributed to this trend. Import volumes were $900.7 million, while export volumes $743.4 million, respectively.

 It should be noted that the forecasts of the Central Bank of Armenia (CBA), the IMF and the WB regarding exports and imports for 2025 differ greatly. According to the CBA's expectations, after almost equal growth in exports and imports in 2024 by 35.6-31.4%, in 2025 the foreign trade turnover will be in decline. Accordingly, the volume of exports will decrease by 19.8-24% and imports by 19.7-22.8%. The IMF also predicts a decline in both exports and imports for Armenia in 2025, but by a more modest 10.4% and 5.4%, respectively. The World Bank, unlike the Central Bank and the IMF, forecasts only a slowdown in growth rates for Armenia in 2025, both in exports and imports, to 5.6% and 7%, respectively.