Pashinyan is losing his trump card

Against the background of widespread failures, Nikol Pashinyan has always been proud that he managed to ensure high growth in the economy. Let’s leave aside what it was as a result of and how much the government has to do with these increases. But what is happening in the economy recently shows that the government is also losing that trump card.

The rates of economic growth have slowed down significantly. And what is much worse, as a result of the tension in Armenian-Russian relations, the risks related to the economy and economic growth have greatly increased.

The policies implemented by the authorities have led to the fact that the economy is facing serious risks of recession. The consequences of that policy are becoming increasingly noticeable.

According to official statistics, the economic growth of Armenia in the first quarter of this year was only 4 percent.

This is the lowest growth recorded in 2021. after. 2022 it was 8.6 percent, 12.1 percent in 2023, 9.2 percent in 2024, and 5.2 percent in 2025.

In the structure of the economy trade and services had the largest share, reaching almost 68 percent of GDP. Industry incl՝ energy had a share of only 16-17 percent.

Agriculture has been declining again, as a result of which not only the volume of agricultural products has decreased, but also the weight of agriculture in the economy. It provided only 3.1 percent of GDP, instead of 3.6 percent of the previous year.

The weight of the processing industry also decreased, dropping from 7.8 percent last year to 7.7 percent.

The financial sector, which has had a significant impact on economic growth in recent years, has entered the recession phase. The decline was 13 percent, as a result of which the weight of that sector in the economy decreased.

The share of information technologies also decreased, from 7.1 to 6.9 percent.

Trade, as always, contributed the most to the 4 percent economic growth recorded in the first quarter, followed by industry, due to the expansion of subsoil exploitation in particular. The contribution of construction was about 0.7 percent, and agriculture had a negative contribution.

As in the previous few years, the influence of external factors continued to be felt on the economy. But it is gradually weakening, which is increasingly noticeable on the economic growth rates. Recently, these trends have been accompanied by much more dangerous phenomena that threaten to collapse the economy. The reckless steps and statements of the Armenian authorities have led to the fact that our economy faced the problem of losing the market of Russia, a key member of the EAEU, and seriously jeopardizing economic relations with that country.

You don’t understand what the hopes of the Armenian authorities rushing to the EU are on. Regardless of the authorities, the victim will be the economy and the people.

Businessmen are already feeling the direct damage of that policy.

Although it is not stated openly, it is nevertheless obvious that the economy of Armenia, which is small and highly dependent on the Russian market, is involved in an economic war with Russia, so to speak. A war which is one-sided and against which Armenia has no resources. Taking into account the unfriendly steps of the Armenian authorities, Russia has started to apply economic sanctions to the import of Armenian products.

From May 22, the import of flowers was limited, as a result of which many greenhouse farms faced the fact of losing the result of their work. The market of flowers exported from Armenia is mainly Russia. And such restrictions are a serious blow for businessmen operating in that business sector. It was announced that there are quality problems not only with flowers, but also with vegetables and fruits. The mass export of fruits may not have started yet, but the export of vegetables is already at risk.

After several warnings and restrictions, the import and sale of “Jermuk” in the Russian market was banned.

The sale of non-alcoholic beverages imported from Armenia, produced by various companies, was also suspended.

If it happens that this situation deepens and includes not only the chain of exports, but also the chain of imports, everything will be much more difficult.

Against the background of restrictions on the import of some Armenian products, recently there have been frequent rumors and hints about the increase in the price of Russian gas supplied to Armenia. It is not difficult to imagine what effect the increase in gas prices will have on the economy. Especially since today there is no alternative to it. No one is ready to supply gas to Armenia at such a price as it is supplied to Armenia within the framework of the advantages provided by EAEU.

Even if we ignore the unwanted developments taking place in one of the main markets for producers and the possible risks related to the import of some strategic goods, the existing tension in the Armenian-Russian economic relations alone is enough for the economic processes in Armenia to appear in a canned state. Statements by the authorities regarding the possibility of using new railway junctions are hopeless attempts to alleviate the situation. We are talking about both the Azeri and the Akhalkalak-Kars railway, regarding which Nikol Pashinyan hastened to give a “wink” to the business, considering it a great event in the life of our economy.

In fact, nothing, and even more so, is not a big event, it is just a figment of Nikol Pashinyan’s imagination. Akhalkalak-Kars will become as much as Azerbaijan’s railway has become the salvation of Armenia’s economy and exports. Even if we theoretically consider that Akhalkalak-Kars is a new export route to Europe, the economy cannot realize this opportunity, because the economy does not have such a potential to enter the European markets. Moreover, it will not have the time when it loses its competitiveness even more due to the increase in the prices of energy carriers.

HAKOB KOCHARYAN

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