Armenia is actively diversifying its foreign relations, focusing on economic development and strategic partnerships. In January 2025, Armenia and the United States signed a Strategic Partnership Charter, aiming to enhance cooperation in defense, security, economic development, and democratic reforms. This agreement reflects Armenia's intent to strengthen ties with Western nations while maintaining existing relationships with other regional powers. Prime Minister Nikol Pashinyan emphasized that the partnership seeks to expand economic and energy ties, deepen defense and security collaboration, reinforce democratic institutions, promote justice and the rule of law, and foster innovation in high technologies.
In April 2025, Armenia's parliament approved a bill to initiate the process of joining the European Union. President Vahagn Khachaturyan signed the bill into law, marking a significant step in Armenia's European integration efforts. Prime Minister Pashinyan clarified that this move does not constitute a formal EU membership application but rather begins a broader integration effort. He emphasized that full accession to the EU would require significant time and likely a public referendum. This initiative comes ahead of Armenia’s general elections and amid peace negotiations with Azerbaijan, which demands constitutional changes from Armenia as a condition for finalizing a peace treaty over Nagorno-Karabakh.
Economically, Armenia has demonstrated resilience. The International Monetary Fund (IMF) completed the fifth review under the Stand-By Arrangement with Armenia, providing access to approximately US$26.1 million. The IMF noted that Armenia's economic activity remains strong, with real GDP growth expected to reach 4.5% in 2025. The IMF's support aims to assist the government’s policy and reform agenda to preserve economic and financial stability and support strong, inclusive, and sustainable growth.
However, Armenia faces challenges due to external factors. The Foreign Intelligence Service of Armenia reported that sanctions against Russia and Iran limit the country's economic potential, as secondary sanctions could impact Armenia's economy. The combination of ongoing sanctions against Russia, the Russia-Ukraine conflict, and other significant factors increases the likelihood of an economic slowdown in Russia, creating additional risks for Armenia's economy. Despite these challenges, Armenia continues to pursue economic growth and diversification through strategic international partnerships and reforms.