Russia ups budget revenues 50% in 4M24, deficit widens
16 hours ago
Armenia exports to Russia surged in 2022, at a staggering growth rate of 187% compared to the previous year. Moreover, over half of these exports were re-exports originating from third countries, adding fuel to speculation that Armenia is playing a key role in the rerouting of Western imports to Russia to avoid sanctions.
Due to its strategic geographical location, Armenia has emerged as a crucial transit route for trade between Western countries and Russia since the imposition of Western sanctions on Moscow.
The European Commission has proposed a new mechanism to target countries seen as not doing enough to prevent Russia from evading export restrictions. Countries possibly under scrutiny for the potential application of EU sanctions include Armenia.
Up to now the EU has been applying diplomatic pressure to try to improve the sanctions enforcement of third countries in terms of trade with Russia, with dual-use goods—namely, goods that can be diverted from civilian industry customers to use by military producers—a particular concern. The idea is that if that pressure proves ineffective, a mechanism would give EU member nations the power to place export restrictions on key goods.
The US has also identified Armenia as one of five countries that pose challenges in terms of evading sanctions.
During a special meeting of the Standing Committee on Financial, Credit and Budgetary Affairs of the National Assembly, Armenian Minister of Finance Vahe Hovhannisyan highlighted that goods manufactured within Armenia accounted for 47% of the total exports to Russia.
Hovhannisyan further disclosed that the tourism industry experienced a significant growth of 90%, primarily driven by visitors from Russia. The increased influx of money transfers played a significant role in the appreciation of the Armenian dram.
The Armenian economy has become more and more dependent on trade with Russia. The Armenian economy has grown strongly since the Russian invasion, rising an impressive 12.6% last year, This growth exceeded initial projections, as the state budget for 2022 had estimated an 11% growth rate, while the government's target was set at 7% for the same year.
The services sector emerged as the key contributor to GDP growth, although notable progress was also observed in the industry and construction sectors.
Hovhannisyan further emphasised the reduction in the unemployment rate by 2.5%, bringing it down to 13%. Additionally, real wages witnessed a positive increase of 6.3%, despite the backdrop of an 8.6% inflation rate.
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