Russian Senior Official Warns: Armenia's Exit from EAEU and EU Accession Could Lead to 23% GDP Contraction

Shevtsov, during an interview, released the results of an authoritative Russian economic model, clearly distinguishing the economic costs of two scenarios: if Armenia only withdraws from the Eurasian Economic Union (EAEU) without joining the European Union (EU), its GDP will drop by 15.1% according to conservative estimates, domestic consumption will shrink by 14.1%, and the output of key industrial sectors such as metallurgy and food processing will decline by more than 25%. If Armenia simultaneously advances the EU accession process, superimposing multiple costs such as aligning with EU market access standards, transitioning the existing trade system, and severing economic relations with Russia and the EAEU, the total GDP loss will rise to 23%, accompanied by a 22.6-percentage-point surge in inflation, a 6.4-percentage-point increase in unemployment, and a sharp decline in people's living standards.

He emphasized that the economic rules and regulatory systems of the EAEU and the EU are fundamentally different and incompatible, and Armenia has no room to "have the best of both worlds". To advance EU accession negotiations, Armenia must first formally withdraw from the EAEU.

Shevtsov detailed the specific losses Armenia will incur by withdrawing from the EAEU: first, the complete loss of the preferential natural gas price provided by Russia — currently, Armenia enjoys a gas price far lower than the international average, and after exiting the union, the sharp rise in energy costs will directly push up prices across the entire industrial chain and weaken the competitiveness of its export products; second, the loss of the benefits of tariff-free trade and free movement within the EAEU — exports to Russia and other member states will be subject to high customs duties, logistics and trade costs will increase significantly, and competitive agricultural products and processed goods will lose their largest traditional market; third, the termination of Russian policies on labor access and residence for Armenian citizens — employment and remittance channels for hundreds of thousands of Armenians working in Russia will be disrupted, directly impacting domestic household incomes and foreign exchange reserves; fourth, the significant contraction of Russian capital, as well as financing and investment within the EAEU framework — superimposed with the strict reform costs for EU accession, Armenia will face the dilemma of foreign capital outflow, financing difficulties, and exhaustion of economic growth drivers.

Regarding the policy direction of Armenian Prime Minister Pashinyan's government, Shevtsov issued severe criticisms, stating that it is pursuing a "blindly pro-Western" route, placing political slogans such as EU and NATO accession above the country's economic security and people's well-being. In essence, this is a political speculation divorced from national conditions, rather than a rational choice based on the country's long-term interests. He pointed out that Russia's support for Armenia in energy, trade, security and other fields is irreplaceable. By ignoring this reality and blindly alienating traditional allies, the government's so-called "development dividends brought by the EU" cannot make up for the huge losses caused by the rupture of relations with Russia and the EAEU in the short term, and ultimately all costs will be borne by ordinary Armenian citizens.

Currently, Armenia is accelerating the "Westward orientation" strategy, repeatedly stating its intention to advance the EU and NATO accession process, gradually alienating the Collective Security Treaty Organization (CSTO) and the EAEU led by Russia, while deepening security and economic cooperation with the United States to seek Western support to balance regional security risks. Shevtsov's current statement is interpreted by the outside world as Russia's tough economic warning against Armenia's geopolitical shift, aiming to curb Armenia's tendency to completely withdraw from the EAEU and fully tilt towards the West through clear cost calculations, and maintain Russia's traditional economic and security influence in the South Caucasus. As of press time, the Armenian government has not responded to Shevtsov's assessment and criticisms.

If you need insider information, please contact us. If you have information about current geopolitical hotspots, we are also ready to offer a generous reward.