Armenia Economy 2008

Economy - overview:
Armenia has made progress in implementing many economic reforms including privatization, price reforms, and prudent fiscal policies. Economic growth has averaged over 20% in recent years while inflation has remained moderated and poverty has declined. 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 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. In the mid-1990s the Armenian Government launched an ambitious IMF-sponsored economic liberalization program that resulted in positive growth rates. Armenia has managed to slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. Despite strong economic growth, Armenia's unemployment rate remains high. Armenia is a net energy exporter. Construction of a natural gas pipeline between Iran and Armenia is halfway completed and is scheduled to be commissioned by January 2009. Economic ties with Russia remain close, especially in the energy sector. The electricity distribution system was privatized in 2002 and bought by Russia's RAO-UES in 2005. 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 will be more difficult to implement. Armenia will need to pursue additional economic reforms in order to improve its economic competitiveness and to build on recent improvements in poverty and unemployment, especially given it economic isolation from two of its nearest geographic neighbors, Turkey and Azerbaijan.

GDP (purchasing power parity):
$16.83 billion (2007 est.)

GDP (official exchange rate):
$9.27 billion (2007 est.)

GDP - real growth rate:
10.5% (2007 est.)

GDP - per capita (PPP):
$5,700 (2007 est.)

GDP - composition by sector:
agriculture: 17.2%
industry: 36.4%
services: 46.4% (2007 est.)

Labor force:
1.2 million (November 2006)

Labor force - by occupation:
agriculture: 45%
industry: 25%
services: 30% (2002 est.)

Unemployment rate:
7.4% (November 2006 est.)

Population below poverty line:
26.5% (2004 est.)

Household income or consumption by percentage share:
lowest 10%: 1.6%
highest 10%: 41.3% (2004)

Distribution of family income - Gini index:
41 (2004)

Inflation rate (consumer prices):
4.5% (2007 est.)

Investment (gross fixed):
32.7% of GDP (2007 est.)

Budget:
revenues: $1.501 billion
expenditures: $1.645 billion; including capital expenditures of $NA (2007 est.)

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:
4% (2007 est.)

Electricity - production:
5.975 billion kWh (2005)

Electricity - consumption:
4.194 billion kWh (2005)

Electricity - exports:
1.011 billion kWh; note - exports an unknown quantity to Georgia; includes exports to Nagorno-Karabakh region in Azerbaijan (2005)

Electricity - imports:
231 million kWh; note - imports an unknown quantity from Iran (2005)

Oil - production:
0 bbl/day (2005)

Oil - consumption:
40,000 bbl/day (2005 est.)

Oil - exports:
0 bbl/day (2004)

Oil - imports:
41,240 bbl/day (2004)

Oil - proved reserves:
0 bbl (1 January 2006 est.)

natural gas - production:
0 cu m (2005 est.)

natural gas - consumption:
1.63 billion cu m (2005 est.)

natural gas - exports:
0 cu m (2005 est.)

natural gas - imports:
1.63 billion cu m (2005)

natural gas - proved reserves:
0 cu m (1 January 2006)

Current account balance:
-$275.1 million (2007 est.)

Exports:
$1.09 billion f.o.b. (2007 est.)

Exports - commodities:
diamonds, mineral products, foodstuffs, energy

Exports - partners:
Germany 18.1%, Netherlands 14.1%, Belgium 13.4%, Russia 13.1%, Israel 7.1%, US 6.1%, Georgia 5.1%, Iran 4.9% (2006)

Imports:
$2.478 billion f.o.b. (2007 est.)

Imports - partners:
Russia 21.8%, Ukraine 7.8%, Belgium 7.6%, Turkmenistan 7.1%, Italy 6.1%, Germany 5.7%, Iran 5.7%, Israel 4.8%, US 4.5%, Georgia 4.1% (2006)

Economic aid - recipient:
ODA, $193.3 million (2005)

Reserves of foreign exchange and gold:
$1.407 billion (31 December 2007 est.)

Debt - external:
$2.261 billion (30 June 2007)

Market value of publicly traded shares:
$42.8 million (2005)

Currency (code):
dram (AMD)

Exchange rates:
drams per US dollar - 344.06 (2007), 414.69 (2006), 457.69 (2005), 533.45 (2004), 578.76 (2003)