Economy Overview
Under the old Soviet central planning system, Armenia had developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics in exchange for raw materials and energy. Since the implosion of the USSR in December 1991, Armenia has switched to small-scale agriculture away from the large agroindustrial complexes of the Soviet era. The agricultural sector has long-term needs for more investment and updated technology. The privatization of industry has been at a slower pace, but has been given renewed emphasis by the current administration. Armenia is a food importer, and its mineral deposits (copper, gold, bauxite) are small. The ongoing conflict with Azerbaijan over the ethnic Armenian-dominated region of Nagorno-Karabakh and the breakup of the centrally directed economic system of the former Soviet Union contributed to a severe economic decline in the early 1990s. By 1994, however, the Armenian Government had launched an ambitious IMF-sponsored economic liberalization program that resulted in positive growth rates in 1995-2003. Armenia joined the WTO in January 2003. Armenia also has managed to slash inflation, stabilize the local currency (the dram), and privatize most small- and medium-sized enterprises. The chronic energy shortages Armenia suffered in the early and mid-1990s have been offset by the energy supplied by one of its nuclear power plants at Metsamor. Armenia is now a net energy exporter, although it does not have sufficient generating capacity to replace Metsamor, which is under international pressure to close. The electricity distribution system was privatized in 2002. Armenia's severe trade imbalance has been offset somewhat by international aid and foreign direct investment. Economic ties with Russia remain close, especially in the energy sector.
Agriculture Products
fruit (especially grapes), vegetables; livestock
Industries
diamond-processing, metal-cutting machine tools, forging-pressing machines, electric motors, tires, knitted wear, hosiery, shoes, silk fabric, chemicals, trucks, instruments, microelectronics, jewelry manufacturing, software development, food processing, brandy
Industrial Production Growth Rate
15% (2002 est.)
Labor Force
1.4 million (2001)
Electricity production
6.492 billion kWh (2002)
Electricity Consumption
5.797 billion kWh (2002)
Electricity Exports
704 million kWh; note - exports an unknown quantity to Georgia; includes exports to Nagorno-Karabakh region in Azerbaijan (2002)
Electricity Imports
463 million kWh; note - imports an unknown quantity from Iran (2002)
Unemployment Rate
30% (2003 est.)
Population Below Poverty Line
50% (2002 est.)
Household Income or Consumption by Percentage Share
Lowest 10%: 2.3%
Highest 10%: 46.2% (1999)
Distribution of Family Income Gini Index
44.4 (1996)
Budget
Revenues: $428.1 million
Expenditures: $491.2 million, including capital expenditures of NA (2004 est.)
Commercial Bank Prime Lending Rate
Market Value of Publicly Traded Shares
Reserves of Foreign Exchange and Gold
$555 million (2004 est.)
Debt External
$905 million (June 2001)
Stock of Direct Foreign Investment at Home
Stock of Direct Foreign Investment Abroad
Exchange Rates
drams per US dollar - 533.45 (2004), 578.76 (2003), 573.35 (2002), 555.08 (2001), 539.53 (2000)
