Armenia today is balancing between three key external economic poles—Russia, the European Union, and the United States—shaping its economic policy amid the need for diversification and persistent dependence on its traditional partner, Russia. An analysis of data for 2024 and the first quarter of 2025 reveals a complex dynamic, with each partner occupying its unique niche.
Russia remains Armenia’s largest trading partner, accounting for approximately 35–40% of the country’s foreign trade turnover. Trade volume with Russia reached nearly $12 billion in 2024 and continues to grow, increasing by 37.5% in the first quarter of 2025. However, exports from Armenia to Russia declined by 6.8%, and the trade balance remains negative, with a deficit of about $420 million. The structure of trade with Russia is dominated by industrial goods, agricultural products, and energy resources. Russian investments, totaling around $4 billion, cover strategic sectors of the economy, including energy, finance, telecommunications, and transportation. Yet, sanctions pressure, ruble instability, and political risks make this dependence vulnerable, highlighting the importance of diversification.
Meanwhile, the European Union demonstrates steady growth and strengthens its influence as a structural partner for Armenia. Trade turnover with the EU rose from $2.6 billion in 2024 to $729 million in the first quarter of 2025, representing about 11.6% of total foreign trade. Exports to EU countries grew at an average annual rate of 29.3% up to 2024, but remained roughly stable at $180 million in early 2025. Imports from the EU continue to rise, reaching $624 million, indicating a more balanced trade structure. The share of finished products and industrial equipment in exports is increasing, with Germany, Italy, France, the Netherlands, and Slovakia standing out as key partners. The EU also actively supports reforms and small business development in Armenia, allocating significant funds through the “Resilience and Growth” program—up to €2.5 billion by 2027—which contributes to infrastructure modernization and economic transformation.
The United States maintains a niche role, accounting for about 2% of Armenia’s foreign trade turnover. Trade with the U.S. amounted to $282 million in 2024 and $123 million in the first quarter of 2025. Exports to the U.S. primarily consist of metals, diamonds, and alcoholic beverages, while imports focus on high-tech goods and electronics. The trade balance with the U.S. is negative, with a deficit of approximately $85 million. Despite the limited scale of investments, the U.S. remains an important partner in the IT and innovation sectors, opening prospects for further development.
The overall foreign trade situation shows that, despite a 47.1% increase in trade turnover in the first quarter of 2025 compared to the same period last year, imports are growing faster than exports—53.5% versus 39.6%. This leads to a deepening trade deficit of $1.44 billion, underscoring the need to boost export potential and improve the trade balance.
Regional partners, such as China, the UAE, and Iran, also exert significant influence. China has become the primary source of import growth (+60%), but exports to China dropped sharply by 73%, exacerbating the trade imbalance. The UAE sees a significant decline in exports but maintains a high trade surplus. Iran shows moderate growth in mutual trade, particularly in agriculture and energy.
The export structure remains oriented toward raw materials, with precious and semi-precious metals accounting for about 36%, alongside finished food products and mineral raw materials. Imports mainly consist of machinery, equipment, vehicles, and chemical products, with notable growth in the segments of automobiles, electronics, and plastics.
Thus, Armenia continues to develop economic ties with its three key partners, striving to reduce the risks of over-dependence on Russia by actively expanding cooperation with the European Union and the United States. The European direction is gradually becoming a structural partner, supporting sustainable development and reforms, while the U.S. retains potential as a source of innovation. Balancing these external economic poles is a critical factor in enhancing economic resilience and diversification, which is of paramount importance for Armenia’s long-term development in the context of a changing geopolitical landscape.