UAE takes over as Armenia’s top exports destination

YEREVAN, OCTOBER 15, ARMENPRESS. Armenia exported nearly $9,7 billion worth of goods in January-August 2024, a year-on-year increase of 2,1 times. According to official statistics, the United Arab Emirates has taken over Russia as Armenia’s top exports destination.

In the 8 months of 2024, most Armenian exports went to the UAE (over $4,3 billion), growing 7,3 times YoY. Russia is the second top exports destination, with Armenian exports totaling over $1,9 billion, which is a 19,5% decrease. The third top exports country for Armenian goods is China with nearly $840 million (3-time increase). 

Economist Armen Ktoyan told Armenpress that this change reflects the change of the exporting goods structure. “Processes have been taking place in our export product structure since late 2023 and they imply a drastic increase of the role of precious metals and gems. That’s why the product structure and the destinations change. Large volume of goods designated as precious metals and gems is imported to Armenia from Russia. And then, after passing some reprocessing, and some parts without [reprocessing], are exported to other countries, first of all to the UAE. That’s why the share of the UAE has drastically increased in our exports structure, nearing 50%, and thanks to one product type,” Ktoyan said.

At the same time, the economist said this allows to have improvements in statistics, but on the other hand this doesn’t create any significant added value in the country and neither does the economic potential grow. 

Ktoyan named two reasons for the decreased exports to Russia. First has to do with the re-exports from Armenia to Russia. “The exports of cars, equipment and technical means multiplied nearly twenty times during the two years since the war began. We had a rather high base, and it had reached its culmination. And the decrease was supposed to happen. We have a decrease first of all in terms of the types of goods that experienced such abrupt growth in the past, and now some adjustments are underway,” Ktoyan said.

The other factor for the decline is the issue of competitiveness in the Russian market in terms of the traditional exports products related to the depreciation of the Russian ruble. “Competing in the Russian market has become rather difficult in conditions of the depreciated ruble. This has been creating additional problems for our traditional directions whose main exports market was Russia. And there are some reductions here too,” the economist said.

Meanwhile, in terms of the total EEU market, the exports to EEU countries comprised over 2 billion dollars, again decreasing by 18,4%. Ktoyan said that 95% of Armenia’s trade turnover with the EEU goes to Russia, thus the developments in the trade with Russia are also reflected on the volumes with the EEU.

Exports to EU countries decreased 24,2% in the reporting period, comprising over 391 million dollars. Nevertheless, exports to some individual EU countries have increased. For example, exports to Belgium grew 50,5% (over 85 million dollars), exports to Romania grew 88,6% (3,9 million dollars.)

Commenting on the decrease, the economist said, “In the past, in the first decade of the 2000s, the exports to EU countries was three times higher than the exports to Russia. Now we have a completely opposite picture. It’s not like in the past we had competitive goods and now we don’t. It’s just that during those times the European companies were the main export partners in terms of mining (mineral) products, these goods were being exported to those markets through them, for further reprocessing, which was reflected on trade with the EU. Now, since there has been a change of capital in the mining sector, it has also impacted the exports markets. The problem is also that in conditions of the EEU direction, where it is possible to gain more profit quicker, the companies that used to work with Europe in the direction of exporting our traditional types of goods, are now redirecting their resources to that destination where they can obtain higher profits more quickly. That’s the logic of business,” Ktoyan said, adding that this also has certain role in the decrease of exports to the EU.