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Armenia: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
Like other CIS (Commonwealth of Independent States) countries, Armenia's economy suffered, at the beginning, from the legacy of a centrally-planned economy and the breakdown of the former Soviet trading models. However, the government was able to carry out wide-ranging economic reforms that have translated into a solid economic growth since 1995. Growth is sustained by domestic demand, which depends strongly in investments and remittances from Armenians working abroad. This economic progress has allowed Armenia to benefit from increasing support from international organizations like the IMF and the World Bank. The total foreign loans and grants accorded to Armenia since 1993 exceed USD 1.1 billion.
However, the country was heavily affected by the international economic crisis. Initially spared because of the poor integration of its banking sector, from 2008 on Armenia was strongly affected: in 2009 the Armenian GDP iecorded a decrease of 14.4%, the sharpest recession in the CIS area after Ukraine. The country was hit particularly hard by the deteriorating financial situation in Russia, on which it is highly dependent; a decline in foreign investment and the collapse of remittances, of which nearly 75% come from Russia.
Having emerged from recession in 2010, partly thanks to loans from the World Bank, IMF and Russia made in 2009 (totaling around 2 billion USD), Armenia returned to growth in 2011 (4, 6%). The increase in world mineral prices, the strong performance of the agriculture sector and and increase in exports from 20 to 25% have had a stimulating effect on the economy. However, inflation remains at 11.5%, the current budget deficit is 14% of GDP and the country's debt remains high (46% of GDP). International aid too remains high: in 2012 Armenia received USD 400 million in credits and programs aimed at improving the state of public finances.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 8.65 | 9.37e | 10.16 | 10.48 | 10.90 |
| GDP (Constant Prices, Annual % Change) | -14.2 | 2.1 | 4.6 | 4.3 | 4.2 |
| GDP per Capita (USD) | 2,647 | 2,840 | 3,048e | 3,114 | 3,205 |
| General Government Gross Debt (in % of GDP) | 40.2 | 39.2e | 41.5e | 41.4 | 39.3 |
| Inflation Rate (%) | 3.5 | 7.3e | 8.8 | 3.3 | 4.3 |
| Unemployment Rate (% of the Labor Force) | 6.8 | 7.0 | 7.0 | 7.0 | 6.5 |
| Current Account (billions USD) | -1.37 | -1.30e | -1.19e | -1.12 | -1.02 |
| Current Account (in % of GDP) | -15.8 | -13.9e | -11.7e | -9.4 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
Agriculture accounts for 16% of the Armenian GDP and employs 40% of the active population. Armenia mainly produces wheat, potatoes, citrus fruits and wine grapes. Cotton and tobacco are the most important industrial crops.
The industrial sector contributes up to 31% to the GDP (of which 18% represents construction) and employs around 15% of the population. Armenia has copper, molybdenum, bauxite, zinc, lead, iron, gold, and mercury deposits, which provide the basis for the country’s chemical industry sector and these are the pillars of its exports.
Lastly, the tertiary sector contributes around 43% to the GDP. New sectors such as information technology and communications, jewelry making and even tourism are beginning to complete the traditional sectors (agriculture and textile). Armenia depends on its neighbors (namely Russia) for its energy needs (oil and gas). Hydroelectricity is very well developed in the country, to the point that Armenia is now exporting it. Jewelry making and the size of its diamonds are acknowledged as a stable domain.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 44.2 | 16.8 | 39.0 |
| Value Added (in % of GDP) | 19.8 | 33.5 | 46.7 |
| Value Added (Annual % Change) | 1.7 | -0.1 | 1.8 |
Source: World Bank - Last Available Data.
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| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Armenian Dram (AMD) - Average Annual Exchange Rate For 1 USD | 416.04 | 342.08 | 305.97 | 363.28 | 373.66 |
Source: World Bank - Last Available Data.
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Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
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Armenia, which joined the WTO in 2003, has a liberal policy in regards to foreign trade. The share of foreign trade in the country’s GDP is around 70%.
Armenia's main export partners are Russia, Germany, the Netherlands, Bulgaria, the United States, Georgia, Iran and China. The main export commodities are pearls and precious stones, iron and steel, beverages and spirits.
The three main import partners of Armenia are Russia, China, Ukraine, Turkey, Germany, Iran and Turkmenistan. Armenia mainly imports non-precious metals, precious and semi-precious stones as well as mineral products (oil and gas), machinery and foodstuffs. The country has been searching for new energy sources, especially after the 2008 Russian-Georgian conflict which temporarily disrupted hydrocarbon supply. It is therefore trying to strenghten its ties with Iran. A pipeline project between the two countries if planned for 2012.
Exports, which declined sharply between 2008 and 2010 due to the economic crisis and the contraction of domestic demand, are dynamic again with an increase of 20 to 25% in 2011 compared to 2010.
The country's number one trading partner is Russia, whose military presence was confirmed by the Armenian parliament until 2044. Tensions with Turkey remain strong and have an impact on trade.
| Foreign Trade Indicators | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 3,268 | 4,426 | 3,321 | 3,783 | 4,152 |
| Exports of Goods (million USD) | 1,152 | 1,057 | 710 | 1,011 | 1,330 |
| Imports of Services (million USD) | 772 | 952 | 839 | 985 | 1,114 |
| Exports of Services (million USD) | 571 | 636 | 580 | 750 | 821 |
| Imports of Goods and Services (Annual % Change) | 13.0 | 7.3 | -21.0 | 0.5 | - |
| Exports of Goods and Services (Annual % Change) | -3.5 | -13.1 | -32.8 | 1.7 | - |
| Imports of Goods and Services (in % of GDP) | 39.2 | 40.7 | 37.2 | 36.6 | - |
| Exports of Goods and Services (in % of GDP) | 19.2 | 15.0 | 12.2 | 12.2 | - |
| Trade Balance (million USD) | -1,600 | -2,664 | -2,081 | -2,033 | - |
| Trade Balance (Including Service) (million USD) | -1,813 | -2,992 | - | - | - |
| Foreign Trade (in % of GDP) | 58.3 | 55.7 | 49.4 | 48.8 | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| Russia | 15.8% |
| Bulgaria | 15.5% |
| Germany | 13.1% |
| Netherlands | 9.8% |
| United States | 8.1% |
| See More Countries | 37.7% |
| Main Suppliers (% of Imports) |
2010 |
| Russia | 21.9% |
| China | 10.6% |
| Ukraine | 6.1% |
| Iran | 5.8% |
| Turkey | 5.6% |
| See More Countries | 50.1% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
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Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
Map of freedom 2010
Source: Freedom House
Note: The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: May 2012