The Armenian economy grew by 5.9 percent in 2024, down from 8.3 percent in 2023 and 12.6 percent in 2022. The government forecast more than a year ago a 5.1 percent growth rate for 2025.
The slowdown, widely attributed to dwindling positive knock-on effects of Western sanctions against Russia, continued in the first quarter of 2025. Data released by the Armenian government’s Statistical Committee shows that economic activity in the country picked up in the following months.
While it continued to be primarily driven by the services and constructions sectors, the higher-than-expected growth rate was made possible by a roughly 5 percent increase in industrial and agricultural production, which had been largely stagnant in 2024.
GDP growth in the South Caucasus country accelerated significantly following the 2022 Russian invasion of Ukraine. Armenian entrepreneurs have taken advantage of the sanctions imposed on Moscow by re-exporting many Western-manufactured goods to Russia.
Russia remained Armenia’s by far the most important commercial partner even after a sharp fall in Russian-Armenian trade recorded last year. According to the Statistical Committee, it accounted for 35.8 percent of Armenia’s overall foreign trade, followed by China (12.3 percent) and the European Union (11.7 percent).