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Armenia Economy 2008

Economy - overview: Since the breakup of the Soviet Union in 1991, Armenia has made progress in implementing many economic reforms including privatization, price reforms, and prudent fiscal policies. The conflict with Azerbaijan over the ethnic Armenian-dominated region of Nagorno-Karabakh contributed to a severe economic decline in the early 1990s. By 1994, however, the Armenian Government launched an ambitious IMF-sponsored economic liberalization program that resulted in positive growth rates. Economic growth has averaged over 13% in recent years. Armenia has managed to reduce poverty, slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. 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. Nuclear power plants built at Metsamor in the 1970s were closed following the 1988 Spitak Earthquake, though they sustained no damage. One of the two reactors was re-opened in 1995, but the Armenian government is under international pressure to close it due to concerns that the Soviet era design lacks important safeguards. Metsamor provides 40 percent of the country's electricity - hydropower accounts for about one-fourth. 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. Construction of a pipeline to deliver natural gas from Iran to Armenia is halfway completed and is scheduled to be commissioned by January 2009. 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 will be more difficult to implement. Despite strong economic growth, Armenia's unemployment rate remains high. 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 its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.
GDP (purchasing power parity): $17.17 billion (2007 est.)
GDP (official exchange rate): $7.974 billion (2007 est.)
GDP - real growth rate: 13.7% (2007 est.)
GDP - per capita (PPP): $5,800 (2007 est.)
GDP - composition by sector: agriculture: 17.2% industry: 36.4% services: 46.4% (2007 est.)
Labor force: 1.2 million (2007 est.)
Labor force - by occupation: agriculture: 46.2% industry: 15.6% services: 38.2% (2006 est.)
Unemployment rate: 7.1% (2007 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)
Investment (gross fixed): 33.6% of GDP (2007 est.)
Budget: revenues: $1.666 billion expenditures: $1.735 billion; including capital expenditures of $NA (2007 est.)
Inflation rate (consumer prices): 4.4% (2007 est.)
Commercial bank prime lending rate: 17.52% (31 December 2007)
Stock of money: $1.507 billion (31 December 2007)
Stock of quasi money: $765.2 million (31 December 2007)
Stock of domestic credit: $1.256 billion (31 December 2007)
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: 3.2% (2007 est.)
Electricity - production: 5.544 billion kWh (2007 est.)
Electricity - consumption: 4.539 billion kWh (2006 est.)
Electricity - exports: 322.6 million kWh; note - exports an unknown quantity to Georgia; includes exports to Nagorno-Karabakh region in Azerbaijan (2007 est.)
Electricity - imports: 400.6 million kWh; note - imports an unknown quantity from Iran (2007 est.)
Oil - production: 0 bbl/day (2007 est.)
Oil - consumption: 41,090 bbl/day (2006 est.)
Oil - exports: 0 bbl/day (2005)
Oil - imports: 44,670 bbl/day (2005)
Oil - proved reserves: 0 bbl (1 January 2006 est.)
Natural gas - production: 0 cu m (2007 est.)
Natural gas - consumption: 2.05 billion cu m (2007 est.)
Natural gas - exports: 0 cu m (2007 est.)
Natural gas - imports: 2.05 billion cu m (2007 est.)
Natural gas - proved reserves: 0 cu m (1 January 2006)
Current account balance: -$571.4 million (2007 est.)
Exports: $1.2 billion f.o.b. (2007 est.)
Exports - commodities: pig iron, unwrought copper, nonferrous metals, diamonds, mineral products, foodstuffs, energy
Exports - partners: Russia 17.5%, Germany 14.7%, Netherlands 13.5%, Belgium 8.7%, Georgia 7.6%, US 6.6%, Switzerland 4.3%, Bulgaria 4.1%, Ukraine 4% (2007)
Imports: $2.807 billion f.o.b. (2007 est.)
Imports - commodities: natural gas, petroleum, tobacco products, foodstuffs, diamonds
Imports - partners: Russia 15.1%, Ukraine 7.7%, Kazakhstan 7.4%, Germany 6.8%, China 6%, France 4.6%, US 4.5%, Iraq 4.3% (2007)
Reserves of foreign exchange and gold: $1.657 billion (December 2007 est.)
Debt - external: $1.372 billion (31 December 2007 est.)
Market value of publicly traded shares: $42.8 million (2005)
Currency (code): dram (AMD)
Exchange rates: drams (AMD) per US dollar - 344.06 (2007), 414.69 (2006), 457.69 (2005), 533.45 (2004), 578.76 (2003)

NOTE: The economy information regarding Armenia on this page is re-published from the 2008 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Armenia Economy 2008 information contained here. All suggestions for corrections of any errors about Armenia Economy 2008 should be addressed to the CIA.