OBSERVATION 2. External Trade․ decline in exports and deepening dependence on imports

The real competitiveness of an economy is best reflected not in internal statistical growth indicators, but in the balance of external trade.

If the economy is strengthening, exports increase, markets diversify, and dependence on imports decreases.

The data for January 2026 shows the opposite picture։ Exports are declining, dependence on imports persists, and the external balance remains deeply negative.

Thus, the external sector reveals the reality that is often not visible in official statements about economic activity/

Decline in exports at the very beginning of the year

In January 2026, Armenia’s exports amounted to 463.9 million USD, which is 13.5% lower than in the same month of 2025.

At the same time, imports amounted to 811.8 million USD։ As a result, total foreign trade turnover amounted to 1.28 billion USD, which is 12% lower than the same month of the previous year.

This means that from the very first month of the year, Armenia’s external trade begins with a weakening trend in exports.

Trade balance․ the real “accounting” of the economy

The foreign trade balance in January 2026 amounted to −347.9 million USD։ This means that Armenia’s economy buys almost twice as much from external markets as it sells.

Such a structure is typical of economies where domestic production is weak, exports are limited, and consumption is largely dependent on imports.

Structural vulnerability of exports

Export data reveals another important issue՝ structural instability of exports.

In January 2026, exports of precious metals and stones decreased by about 45%, prepared food products by around 16%, and machinery and equipment by about 69%.

This shows that Armenia’s exports continue to be characterized by

1․ a limited product structure,

2․ low participation of high-tech production, and

3․ dependence on a few product groups։

Such a structure makes the economy vulnerable to fluctuations in external markets.

Geographical structure․ limited markets

The geographical structure of external trade also reflects a system of dependencies։ In particular, in January 2026, the structure of external trade was as follows՝ CIS countries՝ 29.1%, EU countries՝ 14%, other countries՝ 56.9% of total trade turnover.

At the same time, trade turnover with Russia decreased by about 38%.

These figures show that Armenia’s external trade remains concentrated and based on limited markets.

The “external test” of economic growth

External trade acts as a reality check for the economy։ If the economy is truly strengthening, exports should increase, dependence on imports should decrease, and the external balance should stabilize։

But the data for January 2026 shows the opposite trend:

1․ exports are declining,

2․ the trade deficit remains large,

3․ the economy continues to depend on imports.

Conclusion

External trade figures once again highlight the structural problem of Armenia’s economy, namely that the official narrative of economic activity is not translating into real export expansion.

Armenia’s economy continues to be a consumption-based, import-dependent economy, rather than a production-based, export-driven one.