Armenia exit EAEU to cut GDP by 15 percent - Russian Security Council

If Armenia were to leave the Eurasian Economic Union (EAEU), its GDP would fall sharply by 15.1%, while inflation would increase by 14.3%, affecting many crucial areas of the economy, Russian Security Council Deputy Secretary Alexey Shevtsov said.

He noted that Armenia’s withdrawal from the EAEU would lead to a significant economic decline.

"According to the most conservative estimates, GDP would drop by 15.1% ($3.65 billion), domestic consumption by 14.1%, and industrial production by 26.3%," Alexey Shevtsov said.

Metallurgy, the production of beverages, tobacco products, and food would be affected the most, facing a decline of nearly a third, the security official emphasized.

The official stressed that if Armenia were to join the EU, its GDP could decrease by approximately 7.7%, primarily due to the necessity of implementing the European customs control system.

According to him, Armenia's accession to the EU would entail adapting to European standards, which would involve facing market quotas for Armenian goods and the obligation to comply with European technical regulations - steps that would demand significant additional investments.

Shevtsov further warned that the introduction of the European customs control system would effectively halt the free transit of goods across borders.

Consequently, these changes could lead to a further 7.7% decline in Armenia's GDP, a 7.48% drop in domestic consumption, an increase in inflation by 8.3 percentage points, and a rise in unemployment by 4.1 percentage points.

Yerevan’s potential accession to the EU and the introduction of visas for Russian and Iranian citizens would deal a serious blow to Armenia’s economy, he added.

"Armenia's EU accession and the potential introduction of visas with Russia and Iran would significantly reduce the tourist inflow. It would hit the country’s economy and people hard, given that the tourism industry accounts for about 13.5% of GDP and almost one-fourth of those officially employed work in this sector," Alexey Shevtsov said.