Report projects 15.6% GDP fall for Armenia if Eurasian Economic Union treaty suspended

By Elena Teslova

MOSCOW (AA) - Armenia’s GDP could shrink by 15.6% if the Eurasian Economic Union (EAEU) treaty’s application to the country is suspended, according to a report prepared by the bloc’s four other member states.

The assessment, prepared by Russia, Belarus, Kazakhstan and Kyrgyzstan for consideration at the bloc’s December leaders’ meeting, outlines potential economic consequences of suspension.

Published on the Russian government’s website Tuesday, the report argues that Armenia’s adoption of European standards could undermine the bloc’s common customs territory.

Armenian Prime Minister Nikol Pashinyan has previously defended closer ties with the European Union. In August, he said Armenia’s existing relations with the EU involved no obligations incompatible with its EAEU commitments, while acknowledging that eventual membership in both unions would be impossible.

Under the report’s scenario, suspending the treaty’s application would restore customs controls and taxes, raising business costs and disrupting trade.

Exports of Armenian-made goods could decline by 30-50%, while exports of re-exported goods could drop by more than 90%, the report estimates.

The volume of EAEU exports to Armenia could halve, and Armenia’s total goods trade with other member states could decrease by 55.6%, the report adds.

The report also warns that Armenia could face a 69% increase in gas prices if its participation in the bloc were suspended.

The consequences would extend to the labour market, with Armenian citizens facing stricter conditions for working in other EAEU member states, the report says.

The findings outline a potential scenario and do not indicate that a decision to suspend the treaty’s application to Armenia has been taken.