A report on the possible suspension of Armenia’s participation in the Eurasian Economic Union (EAEU)—prepared by representatives from Russia, Belarus, Kazakhstan, and Kyrgyzstan—outlines the economic consequences such a move would have for the republic. According to the authors, Armenia’s GDP could shrink by 15.6%, while inflation could climb to 14.9%.

The forecast suggests that Armenia’s trade turnover with EAEU member states would decline by more than 55%, and the cost of gas imports would rise by 69%—reaching $657.5 million annually. Furthermore, the report anticipates that exports of tourism services could drop by nearly 40%, and alcohol exports by 50%. Armenian goods, the authors note, would face full-scale veterinary and sanitary inspections, and the country’s citizens might be required to obtain work permits to be employed in other EAEU member states.

Arman Abovyan, a former member of Armenia’s National Assembly, believes the economic downturn could be even more severe than the report’s authors predict.

"I fear that in such a scenario, the decline in GDP would not be 15%, but significantly higher. A GDP contraction of 10% or more signifies that a country is already in a state of economic catastrophe. I think even the word 'collapse' would be an understatement in such a case," he stated in an interview with NSN.

According to Abovyan, the energy, agriculture, and processing sectors would be the hardest hit. He also argues that Armenia risks losing its preferential trade terms with Russia without gaining any comparable advantages in the European market. "In the end, Europe has no intention of buying anything from Armenia; their market is already oversaturated," the former MP stated.

In late August, Armenian Prime Minister Nikol Pashinyan announced that the country might begin the process of applying for EU membership. Representatives from Russia, Belarus, Kazakhstan, and Kyrgyzstan argue that membership in both blocs is incompatible and have suggested the possibility of suspending the EAEU treaty with respect to Armenia.

One of the primary arguments presented in their report concerns the incompatibility of the customs regulations of the EAEU and the European Union.

"A state cannot simultaneously be a member of two customs unions, as it would be impossible to uphold the fundamental principles of both: maintaining a single customs territory; ensuring the free movement of goods and vehicles within that territory—without the need for customs declarations, the payment of duties, or the imposition of customs and other forms of control; and applying unified regulatory measures for foreign trade with third parties," the document asserts.

The authors believe that Yerevan’s move toward the EU in the customs sphere could undermine the integrity of the EAEU’s common market. Specifically, other member states would be forced to conduct additional checks on goods from third countries entering via Armenia. According to the report’s authors, this would hinder the free movement of goods and increase business costs.

The document also highlights the EAEU’s existing free trade agreements with Vietnam, Serbia, Mongolia, the UAE, Indonesia, and Iran. The authors contend that the tariff concessions provided for under these agreements would become impossible to implement should Armenia integrate into a different customs union.