Armenia`s foreign trade sees sharp decline after neutralization of diamond and gold re-export factor

ArmInfo. In Armenia's foreign trade, transactions involving precious metals and stones have seen to decline since 2025, amounting to 25% ($1.97 billion) in total from January- May, compared to 65% ($9.99 billion) a year ago. This category of goods has  played a decisive role in the deterioration of  the annual dynamics of the country's foreign trade turnover, which has dropped from a 2.2- fold increase to a 49% decline. According to  data from the RA Statistical Committee, in January-May 2025, the share of imports and exports of precious metals and stones in the total trade turnover fell to 19% and 35%, respectively. In the same period last year these figures were 57% and 73%. 

In terms of volume, during the reporting period, these products were imported for $923.6 million and exported for $1.05 billion: over the year, their import fell by 80.8%, and export - by 79.8%. For comparison, we note that a sharp increase in this article and its emergence as a dominant in Armenia's foreign trade began to be observed already in 2022, accelerating more and more significantly in the following two years. Specifically, 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). Further in 2023, the significant growth in exports and imports of precious metals/stones and products made from them not only continued, but also accelerated to 3.2-3.3 times, reaching export volumes of up to $3.2 billion and imports of up to $2.7 billion. This trend continued in 2024, and despite some slowdown in growth, the pace remained impressive  (2.5-2.7 times), further increasing export and import volumes to $8 billion and $7.4 billion, respectively.

 However, starting in 2025, the volumes of transactions with precious metals/stones began to decline at an impressive pace, which worsened the annual dynamics of export and import volumes from impressive growth to a significant decline (from an increase of 8.3-9.8 times in January-May 2024 to a decline of 79.8- 80.8% in January-May 2025). Additionally, production volumes in the jewelry industry continue to look very modest: for 2022 - 42 billion drams (an increase of 51.8%), for 2023 - 230.9 billion drams (an increase of 4.9 times), for 2024 - 53.2 billion drams or $ 135.4 million (a decline of 32.2%). The downward dynamics continued in 2025, as evidenced by the decline in  volumes in January-May by 70.4% per annum (to 9.5 billion drams or $ 24.2 million), and a year ago a sharp slowdown in growth rates was already visible to a stagnant 0.7% with a volume of 25.6 billion drams ($ 69.4 million). 

According to experts, the very fact that three years ago precious metals and stones began to significantly dominate exports and imports, with low production volumes in the jewelry industry, already indicated a sharp increase in re-exports and re-imports, which, judging by data for 2024, were still taking place. But since 2025, it has become impossible to conduct such transactions in the previous volume due to the customs duties on jewelry products within the EAEU.  It is known that since 2020, the Russian Federation has more than three times submitted a proposal to the EEC to zero out the import customs value for colored precious stones and small-sized diamonds up to 0.2 carats. However, the issue was never resolved - Armenia blocked the zeroing of duties. Due to the import customs duty on precious stones, it was more profitable to import finished jewelry products from third countries that are not members of the EAEU than to produce them on the territory of 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 zeroed out duties on the import of  jewelry from the UAE. The real volumes of re-export and re-import of precious metals and stones are evidenced by the customs data of Armenia. According to them, in the first half of 2024, diamonds and gold imported mainly from Russia (77% and 99.7%, respectively) were exported mainly to the UAE (77% diamonds and 64% gold) and Hong Kong (17% diamonds and 25% gold). Almost the same picture emerged 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% of diamonds and 71.4% of gold) and Hong Kong (2.7% of diamonds and 25.4% of gold). 

According to statistics, despite a significant drop in transactions  with precious metals and stones, this article still retains its  leadership in exports, but has lost its primacy 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, machinery, equipment and mechanisms, still cannot regain their leadership in foreign trade. But the duration of the decline in transactions with precious metals and stones suggests that  in the short term, mineral products and finished food products will restore their positions. Specifically, in terms of export and import of mineral products, after a weakening of growth rates in 2022 and entering a recession of 13.6-6.9% in 2023, in 2024 both exports (by 15.1%) and imports (by 0.3%) managed to grow. In January-May 2025, the growth rates slowed down for both imports to 6.2% and exports to 1.8%, the volumes of which amounted to  $471 million and $400 million, respectively. Compared to a year ago, this indicates an improvement in the import trend (with an exit from the 3.7% recession) and a significant slowdown in export growth (from 18.7%). This has resulted in mineral products dropping from the 4th position in exports (now behind not only precious metals and stones, but also machinery/equipment and finished food products). At the same  time, mineral products have maintained the 3rd position in imports, after the leading "machinery, equipment and mechanisms" and "precious metals and stones" that have slipped to 2nd position. Exports of machinery, equipment and mechanisms for January-May 2025 reached $471.8 million, and imports - $1.01 billion. The annual dynamics of these indicators are multidirectional: exports have seen a 5% decline, and imports, although they emerged from a 0.1% decline into  growth, managed to accelerate the pace only to a paltry 1.8%.  Machinery, equipment and mechanisms have now taken  the lead in imports, as precious metals/stones, which were previously leading significantly dropped in volume. In exports, precious metals/stones remained in 2nd position, still significantly behind in volume compared to the leading category.

Exports and imports of finished food products improved in annual dynamics, with exports coming out of a 6.5% decline to 31.5% growth, and imports with a sharp acceleration in growth from 1.7% to 32.4%, the volume of which in January-May 2025 reached $446.3 million (3rd position) and $316.4 million (5th position), respectively. In total, the volume of exports for January-May 2025 amounted to $3.02 billion, with a reversal of the annual dynamics from a 2.5-fold growth to a 57.4% decline, and the volume of imports amounted to $4.9 billion,  also with a deterioration in the annual dynamics from 99.6% growth to a 42% decline. As a result, the volume of foreign trade turnover fell by 49% year-on-year (compared to a 2.2- fold increase a year ago), amounting to $7.9 billion in January-May 2025. Moreover, in the country breakdown, a strong deterioration in the annual dynamics of foreign trade turnover is recorded for the leading countries: Russia (from a 2.8-fold increase to a 64.6% decline), the UAE (from a 7.2-fold increase to a 73.2% decline), and China (from a 54.1% increase to a 21.8% decline). Specifically, in the direction of the  Russian Federation, both imports (by 69.2%) and exports (by 7.4%) fell, in the direction of the UAE, a 74% decline in exports was accompanied by a 64.9% increase in imports, and in the direction of China, a 67.8% decline in exports was accompanied by a 31.4% increase in imports. 

It is worth noting that the foreign trade turnover between Armenia and the EU reached 6.3% growth (from 23.7% decline a year ago), exceeding $932.5 million in January-May 2025. This is attributed to the improvement in the annual dynamics of imports from 23.2% decline to 6.9% growth and the same reversal in the export trend from 25% decline to 4.4% growth, the volumes of which amounted to $693.3 million and $239.3 million, respectively. At the same time, the foreign trade turnover between Armenia and the EAEU worsened in annual dynamics from a 2.7-fold growth to a 57.2% decline, amounting  to $2.9 billion in January-May 2025, which was the result of a  significant decline in imports by 68.7% (against a 5-fold growth a year ago) and exports that lingered in decline with a slowdown in growth rates from 18.7% to 6.5%, amounting to $1.7 billion and $1.2 billion, respectively. 

Note that the forecasts of the Central Bank of Armenia (CBA), the IMF and the World Bank regarding exports and imports for 2025 differ greatly. According to the CBA's expectations (June forecast), 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, exports are expected to  decrease by 32.3-36.4% and imports by 29-34.2%, with growth in 2026 projected at 5.4-5% for exports and  4.7-3.1% for imports. In its April forecast, the IMF also predicted a decline in Armenia's foreign trade in 2025, but a more modest one: exports by 10.4% and imports by 5.4%. Unlike the CBA and the IMF, the earlier forecast of the World Bank (November) predicted a sharp  slowdown in Armenia's foreign trade growth in 2025: exports by 5.6% and imports by 7%.