Economy Overview
After several years of double-digit economic growth, Armenia faced a severe economic recession with GDP declining more than 14% in 2009, despite large loans from multilateral institutions. Sharp declines in the construction sector and workers' remittances, particularly from Russia, were the main reasons for the downturn. The economy began to recover in 2010 with nearly 5% growth. Under the old Soviet central planning system, Armenia developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics, in exchange for raw materials and energy. Armenia has since switched to small-scale agriculture and away from the large agroindustrial complexes of the Soviet era. Armenia has managed to reduce poverty, slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. Since the breakup of the Soviet Union in 1991, Armenia had made progress in implementing some economic reforms, including privatization, price reforms, and prudent fiscal policies, but geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made Armenia particularly vulnerable to the sharp deterioration in the global economy and the economic downturn in Russia. The conflict with Azerbaijan over the ethnic Armenian-dominated region of Nagorno-Karabakh contributed to a severe economic decline in the early 1990s and Armenia's borders with Turkey remain closed until 2010, when Turkey and Armenia signed an accord to reestablish diplomatic relations. Armenia is particularly dependent on Russian commercial and governmental support and most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector. The electricity distribution system was privatized in 2002 and bought by Russia's RAO-UES in 2005. Construction of a pipeline to deliver natural gas from Iran to Armenia was completed in December 2008, and gas deliveries are slated to expand due to the April 2010 completion of the Yerevan Thermal Power Plant. Armenia has some mineral deposits (copper, gold, bauxite). Pig iron, unwrought copper, and other nonferrous metals are Armenia's highest valued exports. Armenia's severe trade imbalance has been offset somewhat by international aid, remittances from Armenians working abroad, and foreign direct investment. Armenia joined the WTO in January 2003. The government made some improvements in tax and customs administration in recent years, but anti-corruption measures have been ineffective and the current economic downturn has led to a sharp drop in tax revenue and forced the government to accept large loan packages from Russia, the IMF, and other international financial institutions. Armenia will need to pursue additional economic reforms in order to regain economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.
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
8% (2010 est.)country comparison to the world: 26
Labor Force
1.481 million (2007 est.)country comparison to the world: 131
Electricity production
5.584 billion kWh (2007 est.)country comparison to the world: 109
Electricity Consumption
4.776 billion kWh (2007 est.)country comparison to the world: 110
Electricity Exports
451.3 million kWh; note - exports an unknown quantity to Georgia; includes exports to Nagorno-Karabakh region in Azerbaijan (2007 est.)
Electricity Imports
418.7 million kWh; note - imports an unknown quantity from Iran (2007 est.)
Unemployment Rate
7.1% (2007 est.)country comparison to the world: 73
Population Below Poverty Line
26.5% (2006 est.)
Household Income or Consumption by Percentage Share
Lowest 10%: 1.6%
Highest 10%: 41.3% (2004)
Distribution of Family Income Gini Index
37 (2006)country comparison to the world: 77 44.4 (1996)
Central Bank Discount Rate
NA% (31 December 2009)country comparison to the world: 56 7.25% (2 December 2008) note: this is the Refinancing Rate, the key monetary policy instrument of the Armenian National Bank
Commercial Bank Prime Lending Rate
Stock of Narrow Money
$1.131 billion (31 December 2010 est)country comparison to the world: 138 $1.071 billion (31 December 2009 est)
Stock of Broad Money
$3.507 billion (31 December 2010 est.)country comparison to the world: 130 $3.339 billion (31 December 2009 est.)
Stock of Domestic Credit
$1.821 billion (31 December 2010 est.)country comparison to the world: 127 $1.733 billion (31 December 2009 est.)
Market Value of Publicly Traded Shares
$140.5 million (31 December 2009)country comparison to the world: 110 $176 million (31 December 2008)$105 million (31 December 2007)
Reserves of Foreign Exchange and Gold
$2.247 billion (31 December 2010 est.)country comparison to the world: 94 $2.004 billion (31 December 2009 est.)
Debt External
$5.227 billion (30 June 2010)country comparison to the world: 103 $3.449 billion (31 December 2008)
Stock of Direct Foreign Investment at Home
Stock of Direct Foreign Investment Abroad
Exchange Rates
drams (AMD) per US dollar - 374.29 (2010), 363.28 (2009), 303.93 (2008), 344.06 (2007), 414.69 (2006)
