Armenia’s economy is undergoing a transformation, entering a phase of searching for and shifting toward new directions to sustain economic growth. This perspective was shared by economist Agasi Tavadyan. According to Tavadyan, compared to the same period last year, the current situation is marked by greater volatility. He attributes this to transformation processes: sectors that drove economic growth in 2022–2024 are losing their former prominence, and the country is now seeking new drivers of development.
Currently, economic activity growth is primarily driven by domestic factors. In this context, Tavadyan forecasts that export volumes could nearly halve by the end of the year. Nevertheless, he notes that exports to EAEU and EU countries show positive trends. At this stage, Armenia’s economy is developing largely due to internal rather than external impulses.
Economic growth in Armenia in early 2025 was slow due to the neutralization of factors that previously supported high growth. However, in recent months, the pace has accelerated, mainly due to a slowdown in the industrial sector’s decline. In June, the Economic Activity Index (EAI) reached 8.6%, slightly below May’s figure, while cumulative growth for January–June hit 6.3%, surpassing the January–May indicator.
The primary drivers of growth are the services, trade, construction, and agriculture sectors. Services contributed the most to the EAI—2.3 percentage points—driven by significant growth in financial and insurance activities (17.3%) and the information and communication sector (18.9%). Trade grew by 2.8% in June, accelerating compared to May, though cumulative growth for the first half of the year slowed to 3.9%.
Construction saw a 22.6% increase in June and 18.5% over the half-year, supported, according to experts from the Luys Foundation, by budgetary and organizational investments. Agriculture continues to show positive dynamics, with growth of 10.5% for January–March and 7.3% for the half-year; the sector’s GDP rose by 8.1% in the first quarter.
Meanwhile, industry remains the weak link: the decline in June was 1.2%, an improvement from May, but the cumulative drop for January–June reached 12.1%. The main reason for this decline was a 21.5% reduction in the manufacturing industry, particularly in the production of base metals and jewelry (down 76.3% and 70.4%, respectively).
According to economist Karen Simonyan, the sharp decline in industrial production and foreign trade is interconnected. He explains that a significant portion of gold previously destined for re-export underwent partial processing in Armenia. After this “channel” was closed, the volume of imported gold significantly decreased, which in turn affected industrial processing figures. Consequently, exports also declined.