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flag Armenia Armenia: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

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.

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 recorded 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 (totalling around 2 billion USD), Armenia has returned to growth since 2011. Growth reached 4.6% in 2013 (3.8% in 2012) but is slowed down by corruption and insufficient competition due to monopoly in importations. 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. Inflation was reduced from 3.2% in 2013, and the current budget deficit to 10% of GDP. The country's debt remains high (43.5% of GDP in 2013). International aid is also remaining high: in 2013 Armenia still received IMF credits and benefited from programs aimed at improving the state of public finances. The economic performance of Armenia were better than predicted in 2013. Very dependent on a resilient Russian economy (in particular on remittances from Armenians working in Russia) the country should be preserved from the effect of the eurozone slowdown in 2014.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 10.149.9610.4311.11e11.47
GDP (Constant Prices, Annual % Change) 4.77.13.5e3.2e3.5
GDP per Capita (USD) 3,097e3,035e3e3,373e3,475
General Government Gross Debt (in % of GDP) 35.738.941.4e41.5e42.5
Inflation Rate (%) 7.72.55.8e1.8e3.8
Unemployment Rate (% of the Labor Force) 19.019.018.518.017.9
Current Account (billions USD) -1.12-1.10-0.84-0.85-0.84
Current Account (in % of GDP) -11.1-11.1-8.0-7.7e-7.3

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture accounts for 20.6% 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 37.3% to the GDP (of which over 18% represents construction) and employs around 19% 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 42.1% 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) 38.9 16.7 44.4
Value Added (in % of GDP) 21.9 31.5 46.6
Value Added (Annual % Change) 7.2 -0.9 5.0

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Armenian Dram (AMD) - Average Annual Exchange Rate For 1 USD 363.28373.66372.50401.76409.63

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Armenia on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

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.

Score:
68.9/100
Position:
Moderately Free
World Rank:
41/178
Regional Rank:
18/43

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

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 was around 70% in 2013.

Armenia's main export partners in 2013 were Russia (over 15% of all exports), Bulgaria, the United Kingdom, Belgium and Iran. The main export commodities are pearls and precious stones, iron and steel, beverages and spirits.

The main import partners of Armenia are Russia (over 26% of all imports), China, Germany, Ukraine and Iran. 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 2014.

Exports, which declined sharply between 2008 and 2010 due to the economic crisis and the contraction of domestic demand, are dynamic again increasing regularly since 2011.

In 2014 the country's number one trading partner remains 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 20092010201120122013
Imports of Goods (million USD) 3,3213,7494,1454,2614,477
Exports of Goods (million USD) 7101,0411,3341,4281,480
Imports of Services (million USD) 8399851,1111,1301,162
Exports of Services (million USD) 580750800797825
Imports of Goods and Services (Annual % Change) -19.212.8-1.4-2.80.7
Exports of Goods and Services (Annual % Change) -10.426.514.78.416.3
Imports of Goods and Services (in % of GDP) 43.045.347.449.348.0
Exports of Goods and Services (in % of GDP) 15.520.823.824.627.0
Trade Balance (million USD) -2,090-2,066-2,110-2,112-2,092
Trade Balance (Including Service) (million USD) -2,461-2,383-2,240-2,259-2,204
Foreign Trade (in % of GDP) 58.566.171.173.975.0

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Russia 22.6%
Bulgaria 10.4%
Belgium 8.9%
United States 6.0%
Canada 6.0%
See More Countries 46.1%
Main Suppliers
(% of Imports)
2013
Russia 25.9%
China 9.0%
Ukraine 5.3%
Turkey 4.9%
Iran 4.4%
See More Countries 50.4%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Copper ores and concentratesCopper ores and concentrates 19.1%
Undenatured ethyl alcohol of an alcoholic strength...Undenatured ethyl alcohol of an alcoholic strength by volume of < 80%; spirits, liqueurs and other spirituous beverages (excl. compound alcoholic preparations of a kind used for the manufacture of beverages) 12.7%
Ferro-alloysFerro-alloys 7.0%
Copper, unrefined; copper anodes for electrolytic...Copper, unrefined; copper anodes for electrolytic refining 6.1%
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 6.0%
See More Products 49.1%
- bn USD of products imported in 2013
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 13.5%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 8.0%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 4.0%
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 2.7%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.6%
See More Products 69.2%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2010
53.60%
20.54%
8.48%
8.34%
2.48%
1.72%
1.55%
1.26%
1.09%
0.93%
- bn USD of services imported in 2010
44.65%
40.24%
5.69%
2.71%
2.08%
1.83%
1.16%
0.90%
0.49%
0.25%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Ministry of Agriculture
Ministry of Energy and Natural Resources
Ministry of Economy
Statistical Office
National Statistical Service
Central Bank
Central Bank of the Republic of Armenia
Stock Exchange
Armenian Stock Exchange
Search Engines
Armenian Development Gateway
Export Directory of the Republic of Armenia
Economic Portals
Armenian Business and Trade Portal

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Political Outline

Executive Power
The President of Armenia is the chief of the state and holds the highest executive powers. He is elected by a popular vote for a five-year term. The head of the government is the Prime Minister who is appointed by the President and needs to be confirmed with the majority support of the National Assembly. The Prime Minister appoints the different Ministers who will constitute the government. Since the independence of Armenia in 1991, three presidents have been elected. Serzh Sargsyan is the current President of Armenia following the latest election in February 2008 and took office in April 9, 2008.
Legislative Power
The legislative branch in Armenia is composed of a unicameral National Assembly (Parliament). The National Assembly comprises 131 members who are elected by popular vote for a four-year term.
Main Political Parties
There are numerous political parties in Armenia. The main parties are: 
- HHK (Republican Party of Armenia), a national conservative party, of which the board chairman is the current President S. Sargsyan.
- BHK (Prosperous Armenia) founded by Gagik Tsarukian, a wealthy businessman.
- ARF (Armenian Revolutionary Federation), a socialist party founded in 1890.
- Rule of Law Party (a centrist political party), led by Artur Baghdasarian.
- Heritage Party, founded in 2002, is a national liberal party, led by former Foreign Minister, Raffi Hovanissian.
Current Political Leaders
President: Serzh Sargsyan (since April 2008) - Republican Party
Prime Minister: Hovik Abrahamyan (since 13 April 2014) - Republican Party
Next Election Dates
President election: February 2018
National Assembly: Spring 2017
 

Indicator of Freedom of the Press

Definition:

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 are 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.).

World Rank:
78/180
Evolution:
4 places down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

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.

Ranking:
Partly Free
Political Freedom:
5/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: October 2014