General Information

Armenia has an emerging and open economy with significant GDP growth starting from 2000. However, during last period due to world financial crisis the economy significantly suffered. Legislation is quite liberal both for local and overseas entrepreneurs.

The structure of GDP is quite diversified. Most developed sectors are construction, agriculture and food processing industry, mining sector. Armenian mines produce copper, zinc, molybdenum, gold, and lead. The vast majority of energy is produced with fuel imported from Russia, including gas and nuclear fuel (for its one nuclear power plant); the main domestic energy source is hydroelectric. Small amounts of coal, gas, and petroleum have not yet been developed.

Some sectors of economy are announced by the Government of Armenia as priority ones due to their potential for development. Those are tourism industry, information technologies, jewelry making, pharmaceuticals, and engineering. Most of priority sectors are value added ones mainly connected with high education level of the country people and geographical location. During last decade those sectors are beginning to supplement more traditional sectors in the economy, such as agriculture.

Soviet Armenia: During Soviet era Armenia's economy was largely industrialized - chemicals, electronics, machinery, processed food, synthetic rubber, and textile - which are highly dependent on outside resources. Former Soviet Armenian Republic had developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics in exchange for raw materials and energy.

International: This steady economic progress has earned Armenia increasing support from international institutions. The International Monetary Fund (IMF), World Bank, European Bank for Reconstruction and Development (EBRD), and other international financial institutions (IFIs) and foreign countries are extending considerable grants and loans. Loans to Armenia since 1993 exceed $1.5 billion. These loans are targeted at reducing the budget deficit, stabilizing the currency; developing private businesses; energy; the agriculture, food processing, transportation, and health and education sectors. The government joined the World Trade Organization on February 5, 2003.

Armenia was ranked 83rd by the 2007 UNDP Human Development Index, the highest among the Trans Caucasian Republics. In the 2008 Index of Economic Freedom, Armenia ranked 28th, ahead of countries like Austria, France, Portugal and Italy.

Investment: Armenia has a liberal business legislation directed to creating investment incentives for foreign direct investors. During 2000-2008 year period FDI inflow has greatly increased. According to 2009 data FDI inflow was 840.7 million USD which was by 25.8% lower than in 2008 (connected with the Financial Crisis). However 87% of FDI was invested in real sector. Russian Federation, France, Argentina, Lebanon and United States were among five top investors in the country in 2009. One of the main sources of foreign direct investments remains the Armenian Diaspora, which finances major parts of the reconstruction of infrastructure and other public projects.

Top four sectors which totally make up 85% of overall investment are as follows: energy, transportation, communication and real estate.

Turnover: Total turnover in 2009 was 4.1 billion USD which has declined by 26% in comparison with previous year.

Republic of Armenia Foreign Trade Overall Results

( thousand. US dollars)

Foreign Trade Turnover of the Republic of Armenia

(thousand,US dollars)

Europe and CIS countries are the biggest trade partners of Armenia. 30.3% of overall export-import

transactions are made with EU countries and 52% of overall exportedgoods are exported to Europe.

Republic of Armenia Foreign Trade By Country Groups

(thousand, US dollars)

Top ten trade partners are Russian Federation (22.5% of total turnover), China (7.6%), Ukraine (5.4%),

United States (4.7%), Turkey (4.5%), Iran (3.8%),Switzerland (3.7%), Bulgary (3.7%) Italy (3.0%), and

Belgium (2.6%).

RA Foreign Trade Partners with Higher Index

(Thousand US dollars)