Russian-Armenian trade doubled last year and in the first five months of this year as the South Caucasus country took advantage of the barrage of sanctions imposed on its main trading partner following the Russian invasion of Ukraine. This, coupled with other cash inflows from Russia, is the main reason why the Armenian economy grew by over 12 percent in 2022.
“Last year, our trade turnover with Russia reached more than $5 billion and we have been seeing its doubling,” Kerobian told the TASS news agency as he attended a trade exhibition in the Russian city of Yekaterinburg. He said that the rapid growth will likely moderate to “50-60 percent” by the end of 2023.
Armenian government data shows that the trade with Russia totaled $2.5 billion in January-May 2023, compared with about $1.2 billion with the European Union.
The unprecedented upward trend is primarily driven by Armenian exports to Russia that tripled in 2022 and January-May 2023. Goods manufactured in third countries and re-exported by Armenian firms are thought to have accounted for most of that gain. They include consumer electronics as well as other hi-tech goods and components which Western powers say could be used by the Russian defense industry.
The Armenian government has faced in recent months strong pressure from the United States and the EU to curb the re-export of these items. It announced in late May that Armenian exporters will now need government permission to deliver microchips, transformers, video cameras, antennas and other electronic equipment to Russia.
James O’Brien, the sanctions coordinator at the U.S. State Department, visited Yerevan late last month to discuss the issue with Prime Minister Nikol Pashinian and other Armenian officials. According to the U.S. Embassy in Yerevan, he “expressed appreciation for Armenia’s continued commitment to upholding U.S. sanctions.”