Armenia’s foreign trade in the first half of 2025 has experienced a significant downturn, primarily driven by a sharp decline in gold re-exports. In June, exports fell by 15.9%, while the cumulative decline from January to June reached 52.8%, with the category of “precious and semi-precious stones and metals” accounting for 79.8% of the reduction, contributing 58.5 percentage points to the overall drop.
Excluding gold re-exports, exports would have grown by only 1.1%, highlighting the weak potential of other export sectors. Imports in June decreased by 17.1%, and over the first half of the year, they dropped by 38.6%, also due to the fall in gold re-exports (80.8% of the reduction, contributing 46.1 percentage points). Without re-exports, imports would have risen by 4.1%, noted in the study of the “Luys” Foundation. While the primary decline in imports is tied to gold re-exports, and moderate growth is observed without this factor, risks cannot be entirely dismissed. Even with positive dynamics in certain product categories, concerns remain about the quality of imports, as such growth may be unsustainable amid a slowing economy.
Positive developments include growth in exports and imports in the categories of “prepared food products” (export growth of 31.5%, contributing 1.5 percentage points) and “land, air, and water transport” (contributing 2.7 percentage points to imports). Overall, foreign trade faces a profound slump, reflecting the economy’s heavy reliance on gold re-exports. Without this factor, export and import growth is minimal, underscoring the urgent need for trade diversification.
The decline in both exports and imports triggers a cascade of negative consequences for Armenia’s economy, particularly given its small, open, and trade-dependent structure. The drop in exports leads to a sharp reduction in foreign currency inflows, decreasing overall revenue and potentially weakening the national currency. This, in turn, increases the cost of imports, fueling inflationary pressures and reducing the purchasing power of businesses and households.
The weak export potential beyond re-exports points to a structural issue: Armenia’s economy lacks sufficient competitive industries capable of offsetting declines in one sector with growth in others. This limits prospects for sustainable growth, makes the economy more vulnerable to external shocks, and hinders the development of a robust manufacturing sector. Furthermore, the reduction in exports worsens the trade and balance of payments, which may negatively impact the international investment climate, increase risks for investors, and complicate efforts to attract external financing.
Against this backdrop, the government’s marked caution regarding mining industry projects, which has led to prolonged stagnation in the sector, raises concerns. Historically, the mining industry, alongside metallurgy, accounted for up to 45% of Armenia’s exports, serving as a key source of foreign currency inflows and a stabilizer of the external economic balance. Ignoring the potential of this sector amid rapidly declining export revenues and reliance on a single export-import channel—gold re-exports—heightens the economy’s vulnerability, leaving it without sustainable growth drivers.