Economic overview Armenia, in 34 editions.

Armenia under the old centrally planned Soviet system had built up textile,
machine-building, and other industries and had become a key supplier to
sister republics. In turn, Armenia had depended on supplies of raw materials
and energy from the other republics. Most of these supplies enter the
republic by rail through Azerbaijan (85%) and Georgia (15%). The economy has
been severely hurt by ethnic strife with Azerbaijan over control of the
Nagorno-Karabakh Autonomous Oblast, a mostly Armenian-populated enclave
within the national boundaries of Azerbaijan. In addition to outright
warfare, the strife has included interdiction of Armenian imports on the
Azerbaijani railroads and expensive airlifts of supplies to beleagured beleaguered
Armenians in Nagorno-Karabakh. An earthquake in December 1988 destroyed
about one-tenth of industrial capacity and housing, the repair of which has
not been possible because the supply of funds and real resources has been
disrupted by the reorganization and subsequent dismantling of the central
USSR administrative apparatus. Among facilities made unserviceable by the
earthquake are the Yerevan nuclear power plant, which had supplied 40% of
Armenia's needs for electric power and a plant that produced one-quarter of
the output of elevators in the former USSR. Armenia has some deposits of
nonferrous metal ores (bauxite, copper, zinc, and molybdenum) that are
largely unexploited. For the mid-term, Armenia's economic prospects seem
particularly bleak because of ethnic strife and the unusually high
dependence on outside areas, themselves in a chaotic state of
transformation. The dramatic drop in output in 1992 is attributable largely
to the cumulative impact of the blockade; of particular importance was the
shutting off in the summer of 1992 of rail and road links to Russia through
Georgia due to civil strife in the latter republic.

Under the old Soviet central planning system, Armenia had built up a
developed a more modern industrial sector, supplying machine building equipment,
equipment, textiles, and other manufactured goods to sister republics
in exchange
for raw materials and energy resources. Armenia is a large food
food importer and its mineral deposits (gold, bauxite) are small. The
economic decline in the past three recent years (1991-93) (1991-94) has been
particularly
severe due to the ongoing conflict over the Armenian ethnic Armenian-dominated
enclave region of Nagorno-Karabakh in Azerbaijan. Azerbaijan and Turkey have
blockaded pipeline and railroad traffic to Armenia for its support of
the Karabakh Armenians. This has left Armenia with only sporadic chronic energy
deliveries shortages because of a lack of capacity and frequent disruptions of
natural gas deliveries through unstable Georgia, while as well as
difficulties in obtaining other fuel types of fuel. In addition, bread is
strictly rationed and raw materials there are in critical short supply. Inflation, roughly 14%
per month in the first nine months shortages of 1993, surged even higher in other goods. In 1994, the
fourth quarter. In late 1993, most industrial enterprises were either economy seemed to bottom out. The government has managed to increase
shut its financial and budgetary discipline, bringing inflation down or operating at drastically reduced levels. Only small from
quantities of food were available (mostly humanitarian aid), heat was around 40% per month in first half 1994 to single digits in second
nonexistent, half 1994 and electricity strictly rationed. An the first quarter of 1995. A full economic recovery
cannot be expected until the Nagorno-Karabakh conflict is settled and the blockade
until transportation through Georgia improves. lifted.

Under the old Soviet central planning system, Armenia had
developed a more modern industrial sector, supplying machine building
equipment, tools, textiles, and other manufactured goods to sister republics
in exchange for raw materials and energy resources. energy. Armenia is a large
food importer and its mineral deposits (gold, bauxite) are small. The
economic decline in recent years (1991-94) has been particularly
severe due to the ongoing conflict over the ethnic Armenian-dominated
region of Nagorno-Karabakh in Azerbaijan. Azerbaijan and Turkey have
blockaded pipeline and railroad traffic to Armenia for its support of
the Karabakh Armenians. This has left Armenia with chronic energy
shortages because of a lack of capacity and frequent disruptions of
natural gas deliveries through unstable Georgia, as well as
difficulties in obtaining other types of fuel. In addition, bread is
strictly rationed and there are shortages of other goods. In 1994, Nevertheless, the
economy seemed appears to bottom out. The government has managed have bottomed out due largely to increase
its financial and budgetary discipline, bringing inflation down the government's strong reform program. GDP grew by about 5% in 1995. Inflation fell from
around an average 40% per month in first half early 1994 to single digits an average 2.4% per month in second
half 1994 and the first quarter of 1995. A full economic recovery
recovery, however, cannot be expected until the conflict is settled and the blockade
lifted.

Under the old Soviet central planning system,
Armenia had developed a modern industrial sector, supplying machine
building 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 area. The
agricultural sector has long-term needs for more investment and
updated technology. The privatization of industry has been at a much
slower pace.
pace, but ahead of most of the rest of the CIS. Armenia is a food
importer and its mineral deposits
(gold, bauxite) are small. The
ongoing conflict with Azerbaijan over
the ethnic Armenian-dominated
region of Nagorno-Karabakh and the
embargoes imposed by Azerbaijan and
Turkey contributed to a severe
economic decline in the early 1990s. By
1994, however, the Armenian
Government had launched an ambitious
IMF-sponsored economic program
that has resulted in positive growth
rates in 1995 and 1996. 1995-97. Armenia
also managed to slash inflation and to
privatize most small and
medium-sized enterprises. The chronic energy
shortages Armenia
suffered in recent years has been partially offset
by the energy
supplied by one of its nuclear power plants at Metsamor,
which in 1996
supplied about 40% of the country's energy needs,
according to the
Armenian Government. Moreover, Armenia is expanding
its energy imports
from Iran.

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
USSR in December 1991, Armenia has switched to small-scale
agriculture away
from the large agroindustrial complexes of the
Soviet area. The
agricultural sector has long-term needs for more
investment and
updated technology. The privatization of industry has
been at a slower
pace, but ahead of most of the rest of has been given renewed emphasis by the CIS.
current administration. Armenia is a food
importer importer, and its mineral
deposits (gold, bauxite) are small. The
ongoing conflict with
Azerbaijan over the ethnic Armenian-dominated
region of
Nagorno-Karabakh and the embargoes imposed by Azerbaijan and breakup of the centrally directed economic
Turkey 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 program
that has resulted in positive growth
rates in 1995-97. 1995-98. Armenia also
managed to slash inflation and to
privatize most small small- and
medium-sized enterprises. The chronic energy
shortages Armenia
suffered in recent years has have been partially largely offset
by the energy
supplied by one of its nuclear power plants at Metsamor, Metsamor. The Russian
which in 1996 supplied financial crisis generated concerns about 40% of the country's energy needs, Armenia's economic
according performance in 1998. Although inflation dropped to 10% and GDP grew
about 6%, the Armenian Government. Moreover, Armenia is expanding industrial sector remained moribund. Much of Armenia's
its energy imports population remains heavily dependent on remittances from Iran. relatives
abroad, and remittances from Russia fell off sharply in 1998.

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 area. 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 (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 program
that has resulted in positive growth rates in 1995-98. 1995-99. Armenia also
managed to slash inflation and to privatize most small- and
medium-sized enterprises. The chronic energy shortages Armenia
suffered in recent years have been largely offset by the energy
supplied by one of its nuclear power plants at Metsamor. The Continued Russian
financial crisis generated concerns about Armenia's economic
performance in 1998. Although inflation dropped to 10% and GDP grew
about 6%, difficulties have hurt the industrial trade sector remained moribund. Much of Armenia's
population remains heavily dependent on remittances from relatives
abroad, especially, but have been offset by international aid, domestic restructuring, and remittances from Russia fell off sharply in 1998. foreign direct investment.

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 (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 program that has resulted in positive growth rates in 1995-99. 1995-2000. Armenia also managed to slash inflation and to privatize most small- and medium-sized enterprises. The chronic energy shortages Armenia suffered in recent years have been largely offset by the energy supplied by one of its nuclear power plants at Metsamor. Continued Russian financial difficulties have hurt the Armenia's severe trade sector especially, but have imbalance, importing three times its exports, has been offset somewhat by international aid, domestic restructuring, restructuring of the economy, and foreign direct investment.

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 (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 program that has resulted in positive growth rates in 1995-2000. 1995-2001. Armenia also managed to slash inflation and to privatize most small- and medium-sized enterprises. The chronic energy shortages Armenia suffered in recent years have been largely offset by the energy supplied by one of its nuclear power plants at Metsamor. Armenia's severe trade imbalance, importing three times its exports, imbalance has been offset somewhat by international aid, domestic restructuring of the economy, and foreign direct investment.

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 (gold, (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 program that has resulted in positive growth rates in 1995-2001. 1995-2003. Armenia also has managed to slash inflation inflation, stabilize the local currency (the dram), and to privatize most small- and medium-sized enterprises. The chronic energy shortages Armenia suffered in recent years the early and mid-1990s have been largely 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, domestic restructuring of the economy, and foreign direct investment. Economic ties with Russia remain close, especially in the energy sector.

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 has resulted in positive growth rates in 1995-2003. Armenia joined the WTrO in January 2003. Armenia also has managed to slash inflation, stabilize the local currency (the dram), and privatize most small- and medium-sized enterprises. 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, domestic restructuring of the economy, aid and foreign direct investment. Economic ties with Russia remain close, especially in the energy sector.

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 1995-2003. Armenia joined the WTrO WTO in January 2003. Armenia also has managed to slash inflation, stabilize the local currency (the dram), and privatize most small- and medium-sized enterprises. 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 and foreign direct investment. Economic ties with Russia remain close, especially in the energy sector.

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 1995-2003. 1995-2005. Armenia joined the WTO in January 2003. Armenia also has managed to slash inflation, stabilize the local currency (the dram), 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 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%.

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. 1995-2006. Armenia also has managed to slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. Despite strong economic growth, Armenia's unemployment rate, however, rate remains high, despite strong economic growth. The high. Nuclear power plants built at Metsamor eliminated 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 mid-1990s, but those plants at Metsamor. are under international pressure to close. Armenia is now a net energy exporter, although it does not have sufficient generating capacity to replace Metsamor, which Metsamor. Construction of a natural gas pipeline between Iran and Armenia has been completed and it is under international pressure scheduled to close. be commissioned by April 2007. Economic ties with Russia remain close, especially in the energy sector. The electricity distribution system was privatized in 2002. 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. Economic ties with Russia remain close, especially in Armenia joined the energy sector. WTO in January 2003. 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 2007 and will help to ensure annual average real GDP growth of about 13.9%. more than 10%.

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 breakup of the USSR Soviet Union 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, made progress in implementing many economic reforms including privatization, price reforms, and its mineral deposits (copper, gold, bauxite) are small. prudent fiscal policies. 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 rates. Economic growth has averaged over 13% in 1995-2006. recent years. Armenia has managed to reduce poverty, slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. Despite strong economic growth, Armenia's unemployment rate remains high. 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 eliminated the chronic energy shortages Armenia suffered in the early and mid-1990s, 1970s were closed following the 1988 Spitak Earthquake, though they sustained no damage. One of the two reactors was re-opened in 1995, but those plants are the Armenian government is under international pressure to close. Armenia is now a net energy exporter, although close it does not have sufficient generating capacity due to replace Metsamor. Construction concerns that the Soviet era design lacks important safeguards. Metsamor provides 40 percent of a natural gas pipeline between Iran and Armenia has been completed and it is scheduled to be commissioned by April 2007. 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 2005, recent years, but anti-corruption measures will be more difficult to implement. Investment Despite strong economic growth, Armenia's unemployment rate remains high. Armenia will need to pursue additional economic reforms in the construction order to improve its economic competitiveness and industrial sectors is expected to continue build on recent improvements in 2007 poverty and will help to ensure annual average real GDP growth unemployment, especially given its economic isolation from two of more than 10%. its nearest neighbors, Turkey and Azerbaijan.

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% 10% in recent years. However, with the global economic downturn, Armenia's growth rate dropped to 6.8% in 2008. 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 was completed in December 2008 and after testing is scheduled expected to be commissioned by January 2009. operational in Spring 2009, though it is unlikely significant quantities of gas will flow through it until the Yerevan Thermal Power Plant renovation is completed in 2010. 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. The disruption of rail transit into Armenia during the Georgia-Russia conflict in August 2008 highlighted how vulnerable Armenia's supply chains for key goods - such as gasoline - are to instances of regional instability.

Since the breakup After several years of the Soviet Union in 1991, Armenia has made progress in implementing many double-digit 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 growth, Armenia faced a severe economic decline recession with GDP declining more than 14% in 2009, despite large loans from multilateral institutions. Sharp declines in the early 1990s. By 1994, however, construction sector and workers' remittances, particularly from Russia, were the Armenian Government launched an ambitious IMF-sponsored economic liberalization program that resulted in positive growth rates. Economic growth has averaged over 10% in recent years. However, with main reasons for the global economic downturn, Armenia's growth rate dropped downturn. The economy began to 6.8% recover in 2008. Armenia has managed to reduce poverty, slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. 2010 with nearly 5% growth. 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 Armenia has managed to reduce poverty, slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. Since the 1988 Spitak Earthquake, though they sustained no damage. One breakup of the two reactors was re-opened Soviet Union in 1995, 1991, Armenia had made progress in implementing some economic reforms, including privatization, price reforms, and prudent fiscal policies, but the Armenian government is under international pressure to close it due geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made Armenia particularly vulnerable to concerns that the Soviet era design lacks important safeguards. Metsamor provides 40 percent sharp deterioration in the global economy and the economic downturn in Russia. The conflict with Azerbaijan over the ethnic Armenian-dominated region of Nagorno-Karabakh contributed to a severe economic decline in the country's electricity - hydropower accounts for about one-fourth. Economic ties early 1990s and Armenia's borders with Russia Turkey remain close, closed until 2010, when Turkey and Armenia signed an accord to reestablish diplomatic relations. Armenia is particularly dependent on Russian commercial and governmental support and most key Armenian infrastructure is Russian-owned and/or managed, 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 was completed in December 2008 2008, and after testing is expected gas deliveries are slated to be operational in Spring 2009, though it is unlikely significant quantities expand due to the April 2010 completion of gas will flow through it until the Yerevan Thermal Power Plant renovation is completed in 2010. Plant. 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 have been ineffective and the current economic growth, Armenia's unemployment rate remains high. downturn has led to a sharp drop in tax revenue and forced the government to accept large loan packages from Russia, the IMF, and other international financial institutions. Armenia will need to pursue additional economic reforms in order to regain economic growth and improve its economic competitiveness and to build on recent improvements in poverty and unemployment, employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan. The disruption of rail transit into Armenia during the Georgia-Russia conflict in August 2008 highlighted how vulnerable Armenia's supply chains for key goods - such as gasoline - are to instances of regional instability.

After several years of double-digit economic growth, Armenia faced a severe economic recession with GDP declining more than 14% in 2009, despite large loans from multilateral institutions. Sharp declines in the construction sector and workers' remittances, particularly from Russia, were the main reasons for the downturn. The economy began to recover in 2010 with nearly 5% growth. 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. Armenia has managed to reduce poverty, slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. Since the breakup of the Soviet Union in 1991, Armenia had made progress in implementing some economic reforms, including privatization, price reforms, and prudent fiscal policies, but geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made Armenia particularly vulnerable to the sharp deterioration in the global economy and the economic downturn in Russia. The conflict with Azerbaijan over the ethnic Armenian-dominated region of Nagorno-Karabakh contributed to a severe economic decline in the early 1990s and Armenia's borders with Turkey remain closed until 2010, when Turkey and Armenia signed an accord to reestablish diplomatic relations. closed. Armenia is particularly dependent on Russian commercial and governmental support and most key Armenian infrastructure is Russian-owned and/or managed, 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 was completed in December 2008, and gas deliveries are slated to expand due to the April 2010 completion of the Yerevan Thermal Power Plant. 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 have been ineffective and the current economic downturn has led to a sharp drop in tax revenue and forced the government to accept large loan packages from Russia, the IMF, and other international financial institutions. Armenia will need to pursue additional economic reforms in order to regain economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.

After several years of double-digit economic growth, Armenia faced a severe economic recession with GDP declining more than 14% in 2009, despite large loans from multilateral institutions. Sharp declines in the construction sector and workers' remittances, particularly from Russia, were the main reasons for led the downturn. The economy began to recover in 2010 with nearly 5% growth. 2.1% growth, and picked up to 4.6% growth in 2011, before slowing to 3.8% in 2012. 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. Armenia has managed to reduce poverty, slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. Since the breakup of the Soviet Union in 1991, August 2011, Armenia had made progress in implementing some economic reforms, including privatization, price reforms, experienced a sharp 15 percent currency depreciation and prudent fiscal policies, but an increase in the unemployment rate. Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made Armenia it particularly vulnerable to the sharp deterioration in the global economy and the economic downturn in Russia. The Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1994 as a result of Armenia's ongoing conflict with Azerbaijan over the ethnic Armenian-dominated region of separatist Nagorno-Karabakh contributed to a severe economic decline in the early 1990s and Armenia's borders with Turkey remain closed. region. Armenia is particularly dependent on Russian commercial and governmental support and most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector. The electricity distribution system was privatized in 2002 and bought by Russia's RAO-UES in 2005. Construction Natural gas is primarily imported from Russia but construction of a pipeline to deliver natural gas from Iran to Armenia was completed in December 2008, and gas deliveries are slated to expand due to expanded after the April 2010 completion of the Yerevan Thermal Power Plant. 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 have been ineffective and the current economic downturn has led to a sharp drop in tax revenue and forced the government to accept large loan packages from Russia, the IMF, and other international financial institutions. Amendments to tax legislation, including the introduction of the first ever "luxury tax" in 2011, aim to increase the ratio of budget revenues to GDP, which still remains at low levels. Armenia will need to pursue additional economic reforms and to strengthen the rule of law in order to regain economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.

After several years of double-digit economic growth, Armenia faced a severe economic recession with GDP declining more than 14% in 2009, despite large loans from multilateral institutions. Sharp declines in the construction sector and workers' remittances, particularly from Russia, led the downturn. The economy began to recover in 2010 with 2.1% growth, and picked up to 4.6% growth in 2011, before slowing to 3.8% in 2012. 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. Since August 2011, Armenia experienced a sharp 15 percent currency depreciation and an increase in the unemployment rate. Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to the sharp deterioration in the global economy and the economic downturn in Russia. Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1994 1991 and 1993, respectively, as a result of Armenia's ongoing conflict with Azerbaijan over the separatist Nagorno-Karabakh region. Armenia is particularly dependent on Russian commercial and governmental support and most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector. The electricity distribution system was privatized in 2002 and bought by Russia's RAO-UES in 2005. Natural gas is primarily imported from Russia but construction of a pipeline to deliver natural gas from Iran to Armenia was completed in December 2008, and gas deliveries expanded after the April 2010 completion of the Yerevan Thermal Power Plant. 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 have been ineffective and the economic downturn has led to a sharp drop in tax revenue and forced the government to accept large loan packages from Russia, the IMF, and other international financial institutions. Amendments to tax legislation, including the introduction of the first ever "luxury tax" in 2011, aim to increase the ratio of budget revenues to GDP, which still remains at low levels. Armenia will need to pursue additional economic reforms and to strengthen the rule of law in order to regain economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.

After several years of double-digit economic growth, Armenia faced a severe economic recession with GDP declining more than 14% in 2009, despite large loans from multilateral institutions. Sharp declines in the construction sector and workers' remittances, particularly from Russia, led the downturn. The economy began to recover in 2010 with 2.1% growth, and picked up to 4.6% growth in 2011, before slowing to 3.8% has grown even faster in 2012. the three years since then. 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. Since August 2011, Armenia experienced a sharp 15 percent currency depreciation and an increase in the unemployment rate. Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to the sharp deterioration in the global economy and the economic downturn in Russia. Since August 2011, Armenia has experienced a sharp currency depreciation. Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1991 and 1993, respectively, as a result of Armenia's ongoing conflict with Azerbaijan over the separatist Nagorno-Karabakh region. Armenia is particularly dependent on Russian commercial and governmental support and most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector. The electricity distribution system was privatized in 2002 and bought by Russia's RAO-UES in 2005. Natural gas is primarily imported from Russia but construction of a pipeline to deliver natural gas from Iran to Armenia was completed in December 2008, and gas deliveries expanded after the April 2010 completion of the Yerevan Thermal Power Plant. 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 have been ineffective and the economic downturn has led to a sharp drop in tax revenue and forced the government to accept large loan packages from Russia, the IMF, and other international financial institutions. Amendments to tax legislation, including the introduction of the first ever "luxury tax" in 2011, aim to increase the ratio of budget revenues to GDP, which still remains at low levels. Armenia will need to pursue additional economic reforms and to strengthen the rule of law in order to regain economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.

After several years of double-digit economic growth, Armenia faced a severe economic recession with GDP declining more than 14% in 2009, despite large loans from multilateral institutions. Sharp declines in the construction sector and workers' remittances, particularly from Russia, led the downturn. The economy began to recover in 2010 with 2.1% growth, and has grown even faster in the three years since then. 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. Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to the sharp deterioration in the global economy and the economic downturn in Russia. Since August 2011, Armenia has experienced a sharp currency depreciation. Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1991 and 1993, respectively, as a result of Armenia's ongoing conflict with Azerbaijan over the separatist Nagorno-Karabakh region. Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to the sharp deterioration in the global economy and the economic downturn in Russia. Armenia is particularly dependent on Russian commercial and governmental support and most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector. The sector, including electricity distribution system was privatized in 2002 and bought by Russia's RAO-UES in 2005. Natural gas is primarily imported from Russia but construction of a pipeline to deliver natural gas gas. Remittances from Iran expatriates working in Russia are equivalent to about 20% of GDP and partly offset the country's severe trade imbalance. Armenia was completed joined Russia in the Eurasian Economic Union upon the bloc’s launch in January 2015, even though the ruble’s sharp depreciation in December 2008, 2014 led to currency instability, inflation, and gas deliveries expanded after the April 2010 completion significant decrease of the Yerevan Thermal Power Plant. Armenia's severe trade imbalance has been offset somewhat by international aid, remittances export from Armenians working abroad, and foreign direct investment. Armenia to Russia. Armenia joined the WTO in January 2003. The government has made some improvements in tax and customs administration in recent years, but anti-corruption measures have been ineffective and the economic downturn has led to a sharp drop in tax revenue and forced the government to accept large loan packages from Russia, the IMF, and other international financial institutions. Amendments to tax legislation, including the introduction of the first ever "luxury tax" in 2011, aim to increase the ratio of budget revenues to GDP, which still remains at low levels. ineffective. Armenia will need to pursue additional economic reforms and to strengthen the rule of law in order to regain economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.

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. Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1991 and 1993, respectively, as a result of Armenia's ongoing conflict with Azerbaijan over the separatist Nagorno-Karabakh region.
Armenia joined the WTO in January 2003. The government has made some improvements in tax and customs administration in recent years, but anti-corruption measures have been ineffective. Armenia will need to pursue additional economic reforms and strengthen the rule of law in order to regain economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.
Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to the sharp deterioration in the global economy and the economic downturn in Russia. Armenia is particularly dependent on Russian commercial and governmental support and most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector, including electricity and natural gas. Remittances from expatriates working in Russia are equivalent to about 20% of GDP and partly offset the country's severe trade imbalance. Armenia joined Russia in the Eurasian Economic Union upon the bloc’s bloc's launch in January 2015, even though the ruble’s ruble's sharp depreciation in December 2014 led to currency instability, inflation, and a significant decrease of export in exports from Armenia to Russia. Armenia joined the WTO in January 2003. The government has made some improvements in tax and customs administration in recent years, but anti-corruption measures have been ineffective. Armenia will need to pursue additional economic reforms and to strengthen the rule of law in order to regain economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.

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 agro industrial complexes of the Soviet era. Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1991 and 1993, respectively, as a result of Armenia's ongoing conflict with Azerbaijan over the separatist Nagorno-Karabakh region.
Armenia joined the WTO World Trade Organization in January 2003. The government has made some improvements in tax and customs administration in recent years, but anti-corruption measures have been largely ineffective. Armenia will need to pursue additional economic reforms and strengthen the rule of law in order to regain raise its economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.
Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to the sharp deterioration deteriorations in the global economy commodity markets and the economic downturn challenges in Russia. Armenia is particularly dependent on Russian commercial and governmental support and support, as most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector, including electricity and natural gas. sector. Remittances from expatriates working in Russia are equivalent to about 20% 7-8% of GDP and partly offset the country's severe trade imbalance. GDP. Armenia joined Russia in the Russia-led Eurasian Economic Union upon the bloc's launch in January 2015, even though the ruble's sharp depreciation but has expressed interest in December 2014 led to currency instability, inflation, expanding its economic ties with the European Union as well, and a significant decrease in exports from Armenia March 2017 an EU-Armenia Comprehensive and Enhanced Partnership Agreement was initiated. Armenia’s rising government debt is leading Yerevan to Russia. tighten its fiscal policies – the debt almost reached the debt to GDP threshold set by national legislation as of March 2017.

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 agro industrial complexes of the Soviet era. Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1991 and 1993, respectively, as a result of Armenia's ongoing conflict with Azerbaijan over the separatist Nagorno-Karabakh region.
Armenia joined the World Trade Organization in January 2003. The government has made some improvements in tax and customs administration in recent years, but anti-corruption measures have been largely ineffective. Armenia will need to pursue additional economic reforms and strengthen the rule of law in order to raise its economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from Turkey and Azerbaijan.
Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to deteriorations volatility in the global commodity markets and the economic challenges in Russia. Armenia is particularly dependent on Russian commercial and governmental support, as most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector. Remittances from expatriates working in Russia are equivalent to about 7-8% 12-14% of GDP. Armenia joined the Russia-led Eurasian Economic Union in January 2015, but has expressed interest remained interested in expanding its economic pursuing closer ties with the European Union EU as well, and in March 2017 an EU-Armenia signing a Comprehensive and Enhanced Partnership Agreement was initiated. with the EU in November 2017. Armenia’s rising government debt is leading Yerevan to tighten its fiscal policies – the debt almost reached amount is approaching the debt to GDP ratio threshold set by national legislation as of March 2017. legislation.

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 agro industrial complexes of the Soviet era. Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1991 and 1993, respectively, as a result of Armenia's ongoing conflict with Azerbaijan over the separatist Nagorno-Karabakh region.
Armenia joined the World Trade Organization in January 2003. The government has made some improvements in tax and customs administration in recent years, but anti-corruption measures have been largely ineffective. Armenia will need to pursue additional economic reforms and strengthen the rule of law in order to raise its economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from Turkey and Azerbaijan.
Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to volatility in the global commodity markets and the economic challenges in Russia. Armenia is particularly dependent on Russian commercial and governmental support, as most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector. Remittances from expatriates working in Russia are equivalent to about 12-14% of GDP. Armenia joined the Russia-led Eurasian Economic Union in January 2015, but has remained interested in pursuing closer ties with the EU as well, signing a Comprehensive and Enhanced Partnership Agreement with the EU in November 2017. Armenia’s rising government debt is leading Yerevan to tighten its fiscal policies – the amount is approaching the debt to GDP ratio threshold set by national legislation.