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Armenian Info / Economy
  Economy
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 1995-2005. Armenia joined the WTO in January 2003. Armenia also has managed to slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. Armenia's unemployment rate, however, remains high, despite strong economic growth. 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, remittances from Armenians working abroad, and foreign direct investment. Economic ties with Russia remain close, especially in the energy sector. The government made some improvements in tax and customs administration in 2005, but anti-corruption measures will be more difficult to implement. Investment in the construction and industrial sectors is expected to continue in 2006 and will help to ensure annual average real GDP growth of about 13.9%.
GDP: purchasing power parity - $13.46 billion (2005 est.)
GDP - real growth rate: 13.9% (2005 est.)
GDP - per capita: purchasing power parity - $4,500 (2005 est.)
GDP - composition by sector: agriculture: 19.8%
industry: 41%
services: 39.2% (2005 est.)
Labor force: 1.2 million (2005)
Labor force - by occupation: agriculture 45%, industry 25%, services 30% (2002 est.)
Unemployment rate: 31% (2004 est.)
Population below poverty line: 43% (2003 est.)
Household income or consumption by percentage share: lowest 10%: 1.6%
highest 10%: 41.3% (2004)
Distribution of family income - Gini index: 41.3 (2004)
Inflation rate (consumer prices): -0.2% (2005 est.)
Investment (gross fixed): 25% of GDP (2005 est.)
Budget: revenues: $786.1 million
expenditures: $930.7 million; including capital expenditures of $NA (2005 est.)
Agriculture - products: fruit (especially grapes), vegetables; livestock
Exports: $800 million f.o.b. (2005 est.)
Export commodities: diamonds, mineral products, foodstuffs, energy
Exports - main partners: Belgium 18%, Israel 15.3%, Germany 13.3%, Russia 12.5%, US 8.1%, Netherlands 7.2%, Iran 5.5%, Georgia 4.3%, UAE 4% (2004)
Imports: $1.5 billion f.o.b. (2005 est.)
Import commodities: natural gas, petroleum, tobacco products, foodstuffs, diamonds
Imports - main partners: Russia 11.3%, Belgium 10.1%, Israel 8.4%, US 7.6%, Iran 7.1%, UAE 6.1%, Ukraine 5.9%, Italy 5.5%, Germany 5.2%, Georgia 4.6%, France 4.5% (2004)
Reserves of foreign exchange and gold: $625.6 million (2005 est.)
Debt - external: $1.819 billion (20 September 2005)
Economic aid - recipient: ODA, $254 million (2004)
Currency (code): dram (AMD)
Exchange rates: drams per US dollar - 457.69 (2005), 533.45 (2004), 578.76 (2003), 573.35 (2002), 555.08 (2001), 539.53 (2000)
Fiscal year: calendar year
 


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