YEREVAN — Armenia’s economy grew by 12.6 percent last year on the back of soaring trade with and cash flows from Russia, according to government data released on Monday.
The Armenian government’s Statistical Committee registered the sharpest gains in trade and other services that generated more than half of the country’ GDP worth almost 8.5 trillion drams ($21 billion). The services sector excluding trade alone expanded by over 28 percent, according to it.
By comparison, Armenian industrial output grew by about 8 percent while agricultural production was flat in 2022.
Armenia was initially expected to be hit hard by the barrage of sanctions imposed by the United States, the European Union and other Western powers on Russia, the South Caucasus nation’s leading trading partner, following the Russian invasion of Ukraine.
Russian-Armenian trade fell in March but recovered strongly in the following months as the Russian economy proved more resilient than expected. It almost doubled to $4.4 billion in January-November 2022, accounting for more than one-third of Armenia’s overall foreign trade.
Armenian exports to Russia nearly tripled to just over $2 billion in the eleven-month period. They most probably included goods manufactured in third countries and re-exported from Armenia to Russia as a consequence of the Western sanctions.
According to the Armenian Central Bank, individual remittances from Russia to Armenia quadrupled to almost $3.2 billion in January-November 2022. Much of that money is thought to have been deposited in local banks by tens of thousands of Russians who relocated to the South Caucasus country after the outbreak of the war in Ukraine.
According to the official statistics, the most significant growth were reported by financial and insurance sectors, which grew by 46.9%, information and communication – 45.9%, as well as transport and storage – 45.2%.
Accommodation and catering sectors grew by 23.6%, professional, scientific and technical activities – by 19.9%, administration and related activities – by 19.7%, construction – by 18.8%, wholesale and retail trade, car and motorcycle repair – by 16.8% and processing industry – by 11.9%.
Other areas that showed growth compared to 2021 include culture, entertainment and recreation services – 9.7%, education – 7.4%, public administration, mandatory social security – 6.6%, activities related to real estate – 6.4%, water and wastewater, waste management and recycling – 6.3%, supply of electricity, gas, steam and quality air – 3.3%.
The largest decline was recorded in health care and social services – 6.3%. Decline was also observed in mining industry and operation of open mines – 3.4%, as well as in agriculture, forestry and fisheries – 0.7%.
Armenia’s government growth projection for 2022 was 7%. ($1 – 392.89 drams)