A piece of bargaining: Armenia's GDP grew by $3 billion thanks to Russia
Armenia earned about $3 billion of GDP from re-exports to Russia and the influx of Russian capital after the introduction of Western sanctions against Moscow in 2022, Izvestia found out. By the end of 2024, trade between Moscow and Yerevan increased fivefold, but in 2025, due to Armenia's rapprochement with the European Union, it fell by almost half. Leaving the Eurasian blocs, including the EAEU and the CIS, in order to join the EU will be fatal for the economy of Yerevan, the State Duma believes. Armenia will lose cheap energy resources and profitable sales markets. At the same time, Secretary General of the Commonwealth Sergey Lebedev told Izvestia that Yerevan has no plans to reduce cooperation with the CIS in the near future. The information about which path the Armenian authorities will choose and how it will affect relations with the Russian Federation is in the Izvestia article.
How Armenia earns thanks to Russia
After the start of the CBO and the introduction of Western sanctions, Armenia became one of the main beneficiaries of cooperation with Russia. According to estimates by experts and artificial intelligence, in 2022-2025, Yerevan received about $3 billion in additional GDP due to the Russian factor.
— If we look at the situation through the dynamics of GDP, in 2022-2025, the Armenian economy received a maximum of about 14% of GDP above trend. In monetary terms, this corresponds to about $3.5–3.7 billion of additional GDP," estimated Alexander Zaitsev, CEO of Atomic Capital.
The most important role in this was played by re-exports and parallel imports. Simply put, Russian businesses bought goods from their Armenian counterparts that they could not receive directly from other countries. The relocation and growth of Russian investments in the Armenian economy have made a significant contribution. Among the Russians who moved there were also entrepreneurs who decided to open their own business in Armenia. By the end of 2024, the inflow of investments from the Russian Federation to the Armenian economy amounted to $4 billion, the head of the Ministry of Economy Maxim Reshetnikov reported. Large Russian enterprises in the republic have not only increased the number of jobs, but have also become one of the main taxpayers.
Armenia's rapid economic growth was partially driven, of course, by internal drivers, such as the recovery from the pandemic, the growth of the service sector, and the country's fiscal policy.
As a result, since 2022, the trade turnover between Russia and Armenia has grown almost fivefold and reached peak values in 2024 - about $11.7 billion, although before the imposition of sanctions it was only $2.6 billion.
However, by the end of 2025, the volume of mutual trade has significantly decreased to $6.4 billion, and the reason for this is the "flirtation" with the European Union.
— How do you think Russian entrepreneurs will react to the presence of Armenian businesses in Russia if Russian businesses are squeezed out of Armenia? And what happens next? I think neither Armenia nor Russia wants to know the answer to this question, although it is obvious," Russian Deputy Prime Minister Alexei Overchuk hinted.
The cooperation between Yerevan and Brussels has been going on for quite a long time, but everything changed in March 2024, when the European Parliament adopted a resolution proposing to consider the status of an EU candidate for Armenia. A year later, the country's parliament passed a law on the beginning of the European integration process. The first ever Armenia—EU joint summit is expected in May this year.
Armenia's future in the EAEU, CSTO and the CIS
As they move closer to the EU, officials in Yerevan are increasingly talking about the country's possible withdrawal from two major blocs: the Eurasian Economic Union (EAEU) and the Collective Security Treaty Organization (CSTO). At the last meeting with Vladimir Putin on April 1, Prime Minister Nikol Pashinyan stated: Yerevan understands that simultaneous membership in both the EAEU and the EU is incompatible, therefore, the Armenian people will make their choice in the future. Armenia froze its participation in the CSTO back in February 2024.
Yerevan's participation in another Eurasian bloc, the Commonwealth of Independent States (CIS), remained without comment. Armenia has not yet notified of its desire to withdraw from it, freeze or reduce its participation, CIS Secretary General Sergey Lebedev told Izvestia.
— No, there are no plans [to reduce cooperation between Armenia and the CIS]. In many areas [Yerevan is interested in contacts with the CIS]: in the economic sphere, of course, in the political and humanitarian spheres. They have some doubts and complications in the military-political sphere with the CSTO. Otherwise, as for the CIS, there are no questions," he said.
Membership in the CIS provides member countries, including Armenia, with a number of practical benefits. First of all, it is a visa-free regime, simplified procedures for the employment of citizens and the mutual recognition of diplomas of secondary and higher education. In total, more than 2 million Armenians live in Russia, Vladimir Putin said recently.
Maintaining membership in the CIS allows Yerevan to enjoy a number of advantages without incurring serious obligations, Nadezhda Kapustina, professor at the Financial University under the Government of the Russian Federation, said in a conversation with Izvestia. Earlier, Russian Deputy Prime Minister Overchuk also warned that if Armenia joins the European Union, it will lose air links with Russia.
"For a country where a significant part of the diaspora lives in the member states of the commonwealth, such mechanisms have not an abstract, but quite tangible significance for the daily lives of hundreds of thousands of people," the expert emphasized.
Humanitarian relations between Moscow and Yerevan play a special role. The most striking example is the support of refugees who were forced to leave their homes after Azerbaijan's operation in Nagorno—Karabakh. Thanks to a large-scale project by Russian organizations with the support of Rossotrudnichestvo, 140 tons of humanitarian cargo were delivered to Armenia for more than 9,000 families.
At the moment, the issue of withdrawal from the CIS is not being addressed by the Armenian authorities, said the head of the Analytical Center for Strategic Studies and Initiatives Hayk Khalatyan. However, theoretically, if Yerevan decides to officially withdraw from the EAEU and the CSTO, one way or another, the issue of the CIS will also be raised, as it was previously with Georgia, Ukraine and Moldova.
And it is far from a fact that the EU compensates Armenia for all losses. Today, a number of members who have relatively recently become part of the community are going through difficult times. Bulgaria and Romania, which joined the union in 2007, have so far been unable to enter the eurozone due to high inflation. Hungary and Slovakia are in danger of losing their energy security due to the EU's rejection of Russian oil and gas. Even the founders have serious problems — Germany is experiencing a fuel crisis and stagnation. Moreover, among the candidates for EU membership there are more economically attractive countries, such as Serbia. At the same time, Brussels is in no hurry to accept Belgrade — negotiations have been going on since 2014.
Why Armenia should not withdraw from the EAEU
However, Armenia is unlikely to decide to leave the EAEU. Izvestia sent a request to the country's embassy in the Russian Federation on this issue.
At a meeting with Nikol Pashinyan, Vladimir Putin recalled the serious difference in energy prices in the Russian Federation and the EU. According to him, the cost of gas in Europe has exceeded $600 per 1,000 cubic meters, and Russia sells gas to Armenia for $177.5. Thus, it makes no sense for Yerevan to withdraw from the EAEU, because otherwise the Armenian economy will face serious losses, Leonid Kalashnikov, chairman of the State Duma Committee on CIS Affairs, told Izvestia. According to him, Armenian entrepreneurs will be the first to suffer.
For the structure of Armenia's real economy, these two forms of cooperation are incomparable: if in 2024 the trade turnover between the EAEU countries and Armenia amounted to $12.7 billion, then with the EU it was only about $2.3 billion, explains Ruslan Andreev, project manager of the Polylog Group, political consultant.
— For Yerevan, the EAEU is both the labor market, money transfers, cultural and family ties, — the expert specified.
Free trade zones (FTZs) between the EAEU countries and their partners: Indonesia, Mongolia, the United Arab Emirates, Vietnam, Iran and Serbia play a special role. Free trade zones create favorable conditions for businesses by easing customs duties and simplifying trade.
At the same time, integration with the EU is currently virtually impossible and will create many problems, Ruslan Andreev added.
— Armenia remains a country with complex logistics, dependence on the corridor through Georgia, and high cost of shipping goods to Europe. Therefore, even a political decision on rapprochement with the EU will not allow for a quick redirection of economic flows, especially to compensate for the capacity of the EAEU market," he said.
Thus, Armenia's membership in the EU is impossible in the near and medium term, the expert concluded.
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