MOSCOW: Joining the European Union would cost Armenia about 23% of its GDP, according to the most conservative estimates, Russian Security...
MOSCOW: Joining the European Union would cost Armenia about 23% of its GDP, according to the most conservative estimates, Russian Security Council Deputy Secretary Alexey Shevtsov told reporters.
He also noted that Eurasian Economic Union (EAEU) members are unlikely to face a major negative impact if Armenia withdraws from the organization, as losses will amount to just hundredths of a percent.
TASS has compiled the main statements by the Russian Security Council deputy secretary.
Consequences of Armenia’s withdrawal from the EAEU
Leaving the EAEU will trigger a significant economic decline in the country: "According to most conservative estimates, the GDP would fall by 15.1% (roughly $3.65 billion), domestic consumption would decrease by 14.1% and industrial output by 26.3%. The main damage would be to metallurgy, beverages, tobacco and food production, with declines of up to a third."
"Output in the chemical industry would fall by about a fifth, and by 15% in textiles. Inflation would rise by 14.3 percentage points, while unemployment would increase by 6.4 percentage points."
Impact of Armenia’s EAEU withdrawal on other members
If Armenia withdraws from the EAEU, other member states will not face major negative consequences and "losses will remain at hundredths of a percent."
Risks to Armenia joining the EU
Armenia’s EU accession would cost Yerevan about 23% of GDP: "All in all, joining the EU would cost Armenia nearly 23% of its GDP, according to the most conservative calculations. At the same time, a massive labor shortage of 10.5 percentage points and inflation of 22.6 percentage points will lead to a significant decline in living standards. Domestic consumption would drop by more than 20% from the current level. Further growth of energy prices, especially natural gas prices, is expected."
"Joining the EU will require Armenia to adapt to European standards. Armenian goods will face EU market quotas and will need to comply with European technical regulations, requiring additional investment."
"The introduction of the EU customs control system would effectively disrupt the free transit of goods."
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.
Armenia's potential EU accession and the introduction of visas for Russian and Iranian citizens will significantly reduce the number of tourists and deal a heavy blow to the country’s economy: "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."
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