Armenia's service exports reached an unprecedented $5.69 billion in 2023, more than doubling the 2021 figures. According to a study by Armenia's Economic Journalists Club, the country achieved a historic trade surplus in services of $2.32 billion.
The primary driver of this growth was the influx of Russian specialists and capital following the onset of the war in Ukraine. The tourism sector delivered the most impressive results, reaching $3 billion, accounting for 54% of total service exports. The IT industry also experienced substantial growth, with exports rising to $1.07 billion, representing 19% of the total.
The financial sector displayed exceptional dynamics. In 2022, the export of financial services increased 14-fold compared to the previous year, raising its share in total service exports from 0.8% to 4.6%. This growth was fueled by the active use of Armenian financial institutions by relocated professionals from Russia.
The inflow of talent and capital had a ripple effect across Armenia’s economy. In 2023, the country’s GDP grew by 8.7%, with trade and services contributing 6.7 percentage points to this growth. The services and trade sector now constitute 59% of Armenia's GDP, marking a significant shift in the economy's structure.
This transformation is even more striking in historical context. In 2013, Armenia faced a $123 million deficit in trade in services. By 2023, the situation had dramatically reversed, with $5.69 billion in exports against $3.37 billion in imports, creating a substantial surplus.
However, experts caution about the risks associated with such a transformation. The high concentration of service exports in three sectors—tourism, transportation, and IT—makes the economy vulnerable to external shocks. This vulnerability was evident during the COVID-19 pandemic, which caused a 55% contraction in the services sector, and during the subsequent surge following the influx of specialists from Russia.
Analysts stress the importance of leveraging the current favorable period to implement structural reforms. While the Armenian government initially forecast annual GDP growth at 7%, real figures have led to revised expectations of 5–5.5% for 2024. Economists view it as critical to use the temporary advantage created by external factors to diversify the services sector and reduce dependence on the Russian market.
Despite the overall growth of the services sector over the past decade, its structure remains insufficiently diversified, with tourism and transportation still dominating. The remarkable growth of the IT and financial sectors in the past two years has created new opportunities for the economy but has also heightened dependence on Russia, posing risks if external conditions change.
