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Demographics of Armenia
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Vital statistics summary data
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Vital statistics summary data
B.R. Mitchell. International historical statistics 1750–2005: Africa. Asia and Oceania
Average populationLive birthsDeathsNatural changeCrude birth rate (per 1000)Crude death rate (per 1000)Natural change (per 1000)Crude migration rate (per 1000)Total fertility rateInfant mortality rate (per 1000 births)Life expectancy males females total19501,354,00043,41411,52531,88932.18.523.619511,378,00049,79012,48237,30836.19.127.1 -9.419521,415,00053,84512,91640,92938.19.128.9 -2.019531,454,00051,02514,00737,01835.19.625.5 2.119541,504,00057,99512,30145,90038.68.230.4 4.019551,564,00059,47713,76345,71438.08.829.2 10.719561,616,00062,11912,28650,00038.57.630.8 2.419571,671,00066,86214,10152,76140.08.431.6 2.419581,732,00071,21314,08957,12441.18.133.0 3.519591,796,00072,21113,96858,24340.27.832.4 4.619601,867,00074,82512,67562,15040.16.833.3 6.24.6319611,942,00072,37712,49659,88137.36.430.8 9.44.2719622,005,00069,50513,29756,20834.76.628.0 4.44.1719632,064,00067,38212,04655,33632.65.826.8 2.64.1119642,133,00064,45412,41552,03930.25.824.4 9.03.9819652,205,00062,96912,58250,38728.65.722.9 10.93.9119662,273,00061,59412,44549,14927.15.521.6 9.23.6919672,337,00057,03112,62244,40924.45.419.0 9.23.5519682,401,00057,50312,23145,27223.95.118.9 8.53.4619692,462,00056,20312,78243,42122.85.217.6 7.83.2019702,518,00055,69412,84442,85022.15.117.0 5.73.1719712,580,00058,18812,51845,67022.64.917.7 6.93.1819722,644,00059,31313,73045,58322.45.217.2 7.63.0719732,708,00059,59314,10245,49122.05.216.8 7.42.9219742,770,00060,41914,27646,14321.85.216.7 6.22.8219752,826,00062,86615,49847,36822.25.516.8 3.42.7919762,883,00065,06515,68849,37722.65.417.1 3.12.7219772,943,00065,83015,81350,01722.45.417.0 3.82.6119783,001,00066,69816,46550,23322.25.516.7 3.02.4619793,051,00069,78617,12552,66122.95.617.3 -0.62.3819803,096,00070,32417,12453,20022.75.517.2 -2.52.3319813,144,00073,68216,65957,02323.45.318.1 -2.12.3119823,194,00074,22517,46956,75623.25.517.8 -1.92.2619833,243,00076,43618,36958,06723.65.717.9 -2.62.3519843,292,00079,76719,04360,72424.25.818.4 -3.32.4419853,339,00080,30619,58160,72524.15.918.2 -3.92.5619863,387,00081,19219,41061,78224.05.718.2 --3.82.5819873,435,00078,49219,72758,76522.95.717.1 -2.92.5519883,453,00074,70735,56739,14021.610.311.3 -6.12.4919893,482,00075,25020,85354,39721.66.015.6 -7.22.6119903,545,00079,88221,99357,88922.56.216.3 1.82.6319913,604,00077,82523,42554,40021.66.515.1 1.52.6019923,549,00070,58125,82444,75719.97.312.6 -27.92.4419933,410,00059,04127,50031,54117.38.19.2 -48.42.1419943,309,00051,14324,64826,49515.57.48.0 -37.61.87819953,255,00048,96024,84224,11815.07.67.4 -23.71.84219963,247,00048,13424,93623,19814.87.77.1 -9.61.83419973,242,00043,92923,98519,94413.57.46.2 -7.71.68019983,235,00039,36623,21016,15612.27.25.0 -7.21.50919993,230,00036,50224,08712,41511.37.53.8 -5.31.38820003,221,00034,27624,02510,25110.67.53.2 -6.01.30520013,214,00032,06524,0038,06210.07.52.5 -4.71.23920023,205,00032,22925,5546,67510.18.02.1 -4.9 1.20720033,188,00035,79326,0149,77911.28.23.1 -8.41.34920043,172,00037,52025,67911,84111.88.13.7 -8.71.38320053,155,00037,49926,37911,12011.98.43.5 -8.91.36620063,139,00037,63927,20210,43712.08.73.3 -8.41.34813.969.876.072.920073,122,00040,10526,83013,27512.88.64.3 -9.71.41710.969.876.173.020083,106,00041,18527,41213,77313.38.84.4 -9.51.44410.870.076.373.220093,089,00044,46627,52816,93814.48.95.5 -11.01.55110.470.076.373.220103,073,00044,82527,92116,90414.69.15.5 -10.71.55611.470.176.473.320113,056,00043,34027,96315,377 14.29.15.0 -10.51.49911.670.577.374.0201233,037,00042,48027,59914,88114.09.14.9 -11.11.58310.870.977.574.320133,022,00041,77027,16514,60513.89.04.8 -9.71.5739.771.577.974.820143,014,00043,18327,19615,98714.39.05.3 -7.91.6528.871.878.175.020153,007,00041,76327,87813,88513.99.34.6 -6.91.6458.871.778.275.020162,998,00040,59228,22612,36613.59.44.2 -7.21.6478.671.678.375.020172,986,00037,70027,15710,54312.79.23.5 -7.51.5768.271.978.775.420182,973,00036,57425,75110,82312.38.73.6 -8.01.5737.172.479.075.920192,965,00036,04126,1869,85512.28.83.4 -6.11.5996.173.179.576.520202,959,00036,35336,433-8012.312.3-0.0 -2.01.6567.368.478.673.520212,964,00036,62334,3882,23512.411.60.8 0.91.7106.967.477.472.420222,969,00036,37526,6929,68312.39.03.3 -1.61.7386.771.478.375.120232,991,20036,59024,31312,27712.38.24.1 3.41.8856.674.181.077.720243,075,80033,64825,5768,07211.18.42.7
1 The numbers of life births and deaths until 1959 were calculated from the birth rate and death rate, respectively
2 The high number of deaths in 1988 is related to the Spitak earthquake, while in the rest of the 20th century the death rate was equal to the rate of other European countries (excluding England).
3 The population estimate for 2012 has been recalculated on the basis of the 2011 Census.
2024: https://armstat.am/file/article/population_01_07_24.pdf
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Demographics of Armenia
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Current vital statistics
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Current vital statistics
+ Period Live births Deaths Natural increase January—February 2024 5,422 4,773 +649 January—February 2025 4,928 4,919 +9 Difference -494 (-9.9%) +146 (+3.1%) -640
+Birth rate by provinceProvinceTFR (2022)CBR (2022)Yerevan1.429.9Aragatsotn2.1015.4Ararat2.0815.2Armavir1.9014.0Gegharkunik1.7812.7Lori1.8513.0Kotayk2.0414.5Shirak1.6712.2Syunik1.8212.6Vayots Dzor1.9914.5Tavush1.8012.3
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Demographics of Armenia
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Ethnic groups
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Ethnic groups
+Population of ethnic groups in Armenia in 1926–2022 Ethnicgroup census 19261 census 19392 census 19593 census 19704 census 19795 census 19896 census 20017 census 20118 census 20229 # % # % # % # % # % # % # % # % # % Armenians 743,571 84.5 1,061,997 82.8 1,551,610 88.0 2,208,327 88.6 2,724,975 89.7 3,083,616 93.3 3,145,354 97.9 2,961,514 98.12,875,69798.1 Yazidis 12,237 1.4 20,481 1.6 25,627 1.5 37,486 1.5 50,822 1.7 56,127 1.7 40,620 1.3 35,272 1.231,0771.1 Kurds 2,973 0.3 1,519 0.0 2,131 0.11,6630.1 Russians 19,548 2.2 51,464 4.0 56,464 3.2 66,108 2.7 70,336 2.3 51,555 1.6 14,660 0.5 11,862 0.414,0740.5 Assyrians 2,215 0.3 3,280 0.3 4,326 0.2 5,544 0.2 6,183 0.2 5,963 0.2 3,409 0.1 2,769 0.12,7540.1 Ukrainians 2,286 0.3 5,496 0.4 5,593 0.3 8,390 0.3 8,900 0.3 8,341 0.3 1,633 0.1 1,176 0.01,0050.0 Greeks 2,980 0.3 4,181 0.3 4,976 0.3 5,690 0.2 5,653 0.2 4,650 0.1 1,176 0.0 900 0.03650.0 Georgians 274 0.0 652 0.1 816 0.0 1,439 0.1 1,314 0.0 1,364 0.0 694 0․0 974 0.02230.0 Azerbaijanis 76,870 8.7 130,896 10.2 107,748 6.1 148,189 5.9 160,841 5.3 84,860 2.6 29 0․0 Jews 335 0.0 512 0.0 1,024 0.1 1,047 0.0 959 0.0 720 0.0 109 0․0 127 0․0 Others 18,001 2.0 3,379 0.3 4,864 0.3 9,653 0.4 7,276 0.2 7,580 0.2 3,808 0.1 2,129 0.15,5080.2 Total 880,464 1,282,338 1,763,048 2,491,873 3,037,259 3,304,776 3,213,011 3,018,8542,932,731 1 Source: . 2 Source: . 3 Source: . 4 Source: . 5 Source: . 6 Source: . 7 Source: . 8 Source:
thumb|292x292px|Ethnic map of Armenia
In 2002, ethnic minorities included Russians, Assyrians, Ukrainians, Yazidis, Kurds, Iranians, Greeks, Georgians, and Belarusians. There were also smaller communities of Vlachs, Mordvins, Ossetians, Udis, and Tats. Minorities of Poles and Caucasus Germans also exist, though they are heavily Russified.Garnik Asatryan and Victoria Arakelova, The Ethnic Minorities of Armenia , Routledge, part of the OSCE, 2002
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Demographics of Armenia
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Languages
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Languages
Armenian is the sole official language.
As per 2022 census data, Armenian is the most widely spoken language at 99%, Kurdish at 1%, Russian at 65% and English at 5%.
Armenia is a member of La Francophonie, and hosted its annual summit in 2018.
The largest communities of the Armenian diaspora, are fluent in Russian and English.
+Population of Armenia by Native LanguageYear20012011LanguageNumber%Number%Armenian3,139,15297.702,956,61597.94Yezidi31,7990.9930,9731.03Russian29,5630.9223,4840.78Ukrainian8180.037330.02Assyrian2,4020.08Kurdish2,0300.07English4910.02Others11,6790.362,1260.07Total3,213,0113,018,854
+Population of Armenia by Proficient Language, 2011LanguageNativeNon-NativeTotal % Proficient Armenian2,956,61543,42099.45Yezidi30,9735,3701.2Russian23,4841,591,24653.53Ukrainian7331,1510.06Assyrian2,4021,4680.13Kurdish2,0301,3090.11English491107,9223.59French10,1060.33
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Demographics of Armenia
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Religions
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Religions
Most Armenians are Christians, primarily of the Apostolic Church rite. Armenia is considered the first nation to officially adopt Christianity, which was first preached in Armenia by two Apostles of Jesus, St. Bartholomew and St. Thaddeus in the 1st century. The Armenian Apostolic Church can trace its roots back to the 3rd and 4th centuries. The country formally adopted the Christian faith in 301 A.D. Over 90 percent of Armenians belong to the Armenian Apostolic Church. Armenia also has a population of Catholics and Evangelical Protestants.
According to the 2022 Armenian census, number of adherents of primary religions in Armenia are the following: 2,793,042 (95.2%) Armenian Apostolic, 15,836 (0.5%) Evangelical, 14,349 (0.5%) Yazidism, 17,884 (0.6%) Armenian and Roman (Latin) Catholic, 6,316 (0.2%) Eastern Orthodox, 5,282 (0.2%) Jehovah's Witness, 2,000 (0.1%) Molokan (non-Orthodox Russians), 524 Assyrian Church of the East (Nestorian), 2,132 Paganism, 515 Islam, 118 Judaism. 17,501 (0.6%) people chose No Religion and 49,353 people chose (1.7%) No Response.
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Demographics of Armenia
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Emigration
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Emigration
thumb|450x450px|Annual net migration rate (per 1000 population). Source data and projections (2019) from UN.
Compared to its neighbouring countries, Armenia has the highest share of immigrants (6.5 percent of total population, 2017 data).
The estimated number of population net migration is −24.8 thousand persons, according to the Integrated living conditions survey of households of 2016; for urban population −13.8 thousand and for rural population −11.0 thousand persons.
24.9% of households were involved in external and internal migration processes over the period of 2013– 2016. Migration directions were distributed as follows: 12% – internal, 10.5% – Republic of Artsakh, rest (76.4%) – international (of which 89.8% – Russia). Among household members of age 15 and above, who left their permanent residence in 2013–2016 for 3 months and longer and had not returned as of 2016, 11.9% were in Armenia, 13.0% in Artsakh, and 75.1% in other countries, predominantly in Russia. More than 54% of migrant household members of the age 15 years and above sent money and/ or goods to their families/relatives/friends within 12 months preceding the survey.
According to 2019 UN data, the emigration rate averaged annually around 1.7 per 1000 inhabitants in years 2015–2020 and is expected to remain the same until year 2045. These are below average emigration rate of 11.5 per 1000 in years 2000–2010 and even below the emigration rate of 3.2 per 1000 in years 1980–1985.
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Demographics of Armenia
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Migration during post-Soviet period
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Migration during post-Soviet period
It is estimated that 740,000-1,300,000 people left Armenia between 1988 and 2005.
Economically recessed situation in Armenia during the 1990s enhanced the emigration of 125,000 refugees and displaced persons. Human and natural disasters also caused approximately 192,000 individuals to become internally displaced persons in Armenia. Among the disasters, the major impact was the 1988 Spitak earthquake.
After the collapse of the Soviet Union, borders that were once formal, now assumed real significance. Nonetheless, increased political, inter-ethnic, and social tensions prompted more and more people to migrate between Armenia and its neighbouring countries. As a result, approximately 100,000 persons or 3 percent of the country's population emigrated during the beginning of 1990s.
Refugees and forcibly displaced persons started arriving to Armenia in spring 1988 and continued coming until late 1991. During this time, Armenia gave shelter to approximately 419,000 refugees and displaced persons, 360,000 of whom migrated from Azerbaijan. The rest immigrated from other regions of the former Soviet Union.
Migration flows during the post-soviet period can be divided into 3 stages:
The first stage, prior to 1995, was characterized by mass emigration due to economic reasons, a drop in living standards, and a rapid deterioration in the delivery and quality of public utilities. It is estimated that over 800,000 people emigrated from Armenia during this period and that only 400,000 of them have returned since then.
During the second stage, from 1995 to 2001, emigration decreased, with most of those leaving to be labour migrants in search of better economic and social opportunities. 180,000 people (6 per cent of the population) emigrated from Armenia during these six years These emigrants tended to resettle abroad permanently and were later joined by relatives through family reunification.
The third stage, from 2002 to the present, is marked by a constant yearly increase in the number of persons travelling to and from Armenia. This stage was also characterized by a shift to a positive migration balance.
According to government records, over 55 per cent of all emigrants are unmarried and 60 per cent are males between the ages of 20 and 44 (very few are children and even fewer are elderly people). Most have an educational level far higher than the national average and have no intention of returning to Armenia. Although no hard data exists, emigrant families appear to be even less likely to return.
The emigration of the major part of the Armenian population has brought about important changes. For example, a decrease in the number of people of reproductive age in Armenia has led to a progressive drop in marriages and birth rates. There has also been a considerable change in the ethnic composition of the population in Armenia due to a higher rate of emigration among ethnic minorities.
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Demographics of Armenia
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Immigration
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Immigration
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Demographics of Armenia
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Migration data
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Migration data
+ Armenia Migration Data (2010-present) Year RA - Total Arrived RA - Total Departed Net Migration - Total International Migration - Arrived International Migration - Departed 2010 32,500 69,800 -37,300 18,300 55,600 2011 30,900 59,400 -28,500 17,800 46,300 2012 29,300 38,700 -9,400 19,500 28,900 2013 19,800 44,200 -24,400 12,300 36,700 2014 17,400 39,200 -21,800 10,700 32,500 2015 19,500 45,400 -25,900 10,600 36,500 2016 15,900 40,800 -24,900 8,100 33,000 2017 13,300 37,300 -24,000 9,200 33,200 2018 15,300 33,586 -18,286 10,100 28,386 2019 15,800 31,200 -15,400 12,100 27,500 2020 36,600 33,200 3,400 10,800 7,400 2021 19,205 23,324 -4,119 10,120 14,239 2022 29,585 23,505 6,080 15,400 9,320 2023 78,500 37,100 41,400 48,300 6,900
Migration Statistics, Statistical Committee of the Republic of Armenia, 2021.
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Demographics of Armenia
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Wealth and poverty
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Wealth and poverty
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Demographics of Armenia
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Inequality
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Inequality
Out of 41 emerging economies, Armenia was among only four, which recorded rising inequality (measured by Gini coefficient) in years 2007–2015.
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Demographics of Armenia
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Wealth
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Wealth
According to Global Wealth Report, prepared by Credit Suisse, mean wealth per adult in Armenia in 2019 is estimated at $19,517 (rising 9 times from estimated $2,177 in year 2000). Mean wealth per adult in Armenia surpasses corresponding values for neighboring countries Georgia and Azerbaijan by over 50%, all CIS countries except Russia and Kazakhstan, and neighboring Iran. Growth rate of mean wealth per adult between 2000 and 2019 with the value of 9 times beats all neighboring countries, most of CIS countries as well as Estonia, Latvia and Lithuania.
Median wealth per adult is reported at $8,309 in 2019, above the world average, rising 9.6 times from $862 in year 2000.
Between 2000 and 2019, average debts per adult grew 28.7 times to $1,261, or 6.5% of wealth per adult (below the 11.9% world average).
55% of adults own less than $10,000, 42.7% — $10,000–$100,000, 2.2% — $100,000–$1 million and 0.1% — over $1 million. The share of adults owning less than $10,000 with the value of 55% is less than corresponding value in each of CIS countries, neighboring Iran and Turkey, as well as the world average. Gini coefficient for wealth is reported at 66.3%, less than 82.4% the European average and 88.5% the world average.
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Demographics of Armenia
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Poverty
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Poverty
As much as 53.5% of the country's population was officially considered poor in 2004. Poverty fell significantly in the following years amid double-digit economic growth that came to an end with the onset of the global financial crisis in late 2008. It soared to almost 36% in 2010, one year after Armenia's Gross Domestic Product shrunk by over 14%. Afterwards, there was a decreasing trend throughout the last years reaching 23.5% in 2018, down from 25.7% in 2017."Armenian Government Reports Further Drop In Poverty" azatutyun.am
The poverty indicators in Shirak, Lori, Kotayk, Tavush and Armavir provinces are higher than the country average. The highest poverty rate in the country has been recorded in Shirak province, where 46% of the population is below the poverty line. To overcome poverty, Armenia would need AMD 63.2 billion, or an amount equal to 1.2% of GDP, in addition to the resources already allocated for social assistance, assuming that such assistance would be efficiently targeted to the poor.
In terms of the international poverty line corresponding to US$1.25 in 2005 PPP, poverty in Armenia went down from 19.3% in the year 2001 to 1.5% in the year 2008 and remained nearly unchanged until the year 2015 moving in the range of 1.5% – 2.7%.
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Demographics of Armenia
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See also
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See also
Assyrians in Armenia
Censuses of Armenia
Demographics of the Republic of Artsakh
Ethnic minorities in Armenia
Greeks in Armenia
Health in Armenia
Kurds in Armenia
List of European countries by population
Lom people
Peoples of the Caucasus
Russians in Armenia
Social protection in Armenia
Yazidis in Armenia
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Demographics of Armenia
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Notes
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Notes
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Demographics of Armenia
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References
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References
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Demographics of Armenia
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Bibliography
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Bibliography
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Demographics of Armenia
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External links
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External links
Population cartogram of Armenia
Khachatryan, Anush; Karapetyan, Arsen: "Public Green Space in Armenian Cities: A Legal Analysis" in the Ccaucasus Analytical Digest No. 23
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Demographics of Armenia
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Table of Content
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Short description, Historical statistics, Population size and structure, Structure of the population, Vital statistics, Life expectancy, Reproduction indicators, Vital statistics summary data, Current vital statistics, Ethnic groups, Languages, Religions, Emigration, Migration during post-Soviet period, Immigration, Migration data, Wealth and poverty, Inequality, Wealth, Poverty, See also, Notes, References, Bibliography, External links
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Politics of Armenia
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Short description
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The politics of Armenia take place in the framework of the parliamentary representative democratic republic of Armenia, whereby the president of Armenia is the head of state and the prime minister of Armenia the head of government, and of a multi-party system. Executive power is exercised by the president and the Government. Legislative power is vested in both the Government and Parliament.
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Politics of Armenia
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History
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History
Armenia became independent from the Russian Empire on 28 May 1918 as the Republic of Armenia, later referred as First Republic of Armenia. About a month before its independence Armenia was part of short lived Transcaucasian Democratic Federative Republic. Suffering heavy losses during the Turkish invasion of Armenia and after the Soviet invasion of Armenia, the government of the First Republic resigned on 2 December 1920. Soviet Russia reinstalled its control over the country, which later became part of the Transcaucasian SFSR. The TSFSR was dissolved in 1936 and Armenia became a constituent republic of the Soviet Union known as the Armenian SSR, later also referred as the Second Republic of Armenia.
During the dissolution of the Soviet Union the population of Armenia voted overwhelmingly for independence following the 1991 Armenian independence referendum. It was followed by a presidential election in October 1991 that gave 83% of the votes to Levon Ter-Petrosyan. Earlier in 1990, when the National Democratic Union party defeated the Armenian Communist Party, he was elected Chairman of the Supreme Council of Armenia. Ter-Petrosyan was re-elected in 1996. Following public discontent and demonstrations against his policies on Nagorno-Karabakh, the President resigned in January 1998 and was replaced by Prime Minister Robert Kocharyan, who was elected as second President in March 1998. Following the assassination of Prime Minister Vazgen Sargsyan, parliament Speaker Karen Demirchyan and six other officials during parliament seating on 27 October 1999, a period of political instability ensued during which an opposition headed by elements of the former Armenian National Movement government attempted unsuccessfully to force Kocharyan to resign. In May 2000, Andranik Margaryan replaced Aram Sargsyan (a brother of assassinated Vazgen Sargsyan) as Prime Minister.
Kocharyan's re-election as president in 2003 was followed by widespread allegations of ballot-rigging. He went on to propose controversial constitutional amendments on the role of parliament. These were rejected in a referendum the following May. Concurrent parliamentary elections left Kocharyan's party in a very powerful position in the parliament. There were mounting calls for the President's resignation in early 2004 with thousands of demonstrators taking to the streets in support of demands for a referendum of confidence in him.
The Government of Armenia's stated aim is to build a Western-style parliamentary democracy. However, international observers have questioned the fairness of Armenia's parliamentary and presidential elections and constitutional referendum between 1995 and 2018, citing polling deficiencies, lack of cooperation by the Electoral Commission, and poor maintenance of electoral lists and polling places. Armenia is considered one of the most democratic nations of the Commonwealth of Independent States and the most democratic in the Caucasus region.
The observance of human rights in Armenia is uneven and is marked by shortcomings. Police brutality allegedly still goes largely unreported, while observers note that defendants are often beaten to extract confessions and are denied visits from relatives and lawyers. Public demonstrations usually take place without government interference, though one rally in November 2000 by an opposition party was followed by the arrest and imprisonment for a month of its organizer. Freedom of religion is not always protected under existing law. Nontraditional churches, especially the Jehovah's Witnesses, have been subjected to harassment, sometimes violently. All churches apart from the Armenian Apostolic Church must register with the government, and proselytizing was forbidden by law, though since 1997 the government has pursued more moderate policies. The government's policy toward conscientious objection is in transition, as part of Armenia's accession to the Council of Europe.
Armenia boasts a good record on the protection of national minorities, for whose representatives (Assyrians, Kurds, Russians and Yazidis) four seats are reserved in the National Assembly. The government does not restrict internal or international travel.
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Politics of Armenia
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Transition to a parliamentary republic
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Transition to a parliamentary republic
In December 2015, the country held a referendum which approved transformation of Armenia from a semi-presidential to a parliamentary republic.
As a result, the president was stripped of his veto faculty and the presidency was downgraded to a figurehead position elected by parliament every seven years. The president is not allowed to be a member of any political party and re-election is forbidden.
Skeptics saw the constitutional reform as an attempt of third president Serzh Sargsyan to remain in control by becoming Prime Minister after fulfilling his second presidential term in 2018.
In March 2018, the Armenian parliament elected Armen Sarkissian as the new President of Armenia. The controversial constitutional reform to reduce presidential power was implemented, while the authority of the prime minister was strengthened. In May 2018, parliament elected opposition leader Nikol Pashinyan as the new prime minister. His predecessor Serzh Sargsyan resigned two weeks earlier following widespread anti-government demonstrations.
In June 2021, early parliamentary elections were held. Nikol Pashinyan's Civil Contract party won 71 seats, while 29 went to the Armenia Alliance headed by former President Robert Kocharyan. The I Have Honor Alliance, which formed around another former president, Serzh Sargsyan, won seven seats. After the election, Armenia's acting Prime Minister Nikol Pashinyan was officially appointed to the post of prime minister by the country's president Armen Sarkissian. In January 2022, Armenian President Armen Sarkissian resigned from office, stating that the constitution does no longer give the president sufficient powers or influence. On 3 March 2022, Vahagn Khachaturyan was elected as the fifth president of Armenia in the second round of parliamentary vote.
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Politics of Armenia
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Government
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Government
|President
|Vahagn Khachaturyan
|Independent
|13 March 2022
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|Prime Minister
|Nikol Pashinyan
|Civil Contract
|8 May 2018
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Politics of Armenia
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Legislative branch
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Legislative branch
The unicameral National Assembly of Armenia (Azgayin Zhoghov) is the legislative branch of the government of Armenia.
Before the 2015 Armenian constitutional referendum, it was initially made of 131 members, elected for five-year terms: 41 members in single-seat constituencies and 90 by proportional representation. The proportional-representation seats in the National Assembly are assigned on a party-list basis among those parties that receive at least 5% of the total of the number of the votes.
Following the 2015 referendum, the number of MPs was reduced from the original 131 members to 101 and single-seat constituencies were removed.
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Politics of Armenia
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Political parties and elections
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Political parties and elections
As of January 2025, there are 123 political parties registered in Armenia.How many parties are there in the Republic of Armenia as of January 1, 2025? Last year alone, 8 parties received state registration The electoral threshold is currently set at 5% for single parties and 7% for blocs.
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Politics of Armenia
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Latest national elections
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Latest national elections
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Politics of Armenia
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Latest presidential elections
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Latest presidential elections
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Politics of Armenia
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Independent agencies
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Independent agencies
Independent of three traditional branches are the following independent agencies, each with separate powers and responsibilities:
the Constitutional Court of Armenia
the Central Electoral Commission of Armenia
the Human Rights Defender of Armenia
the Central Bank of Armenia
the Prosecutor General of Armenia
the Audit Chamber of Armenia
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Politics of Armenia
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Corruption
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Corruption
Transparency International's 2024 Corruption Perceptions Index ranked Armenia 60th out of 180 in the world with 47 points. This has pushed the country up from being ranked at 60th in 2020 and 58th in 2021. According to Transparency International, Armenia has improved significantly on the Corruption Perception Index since 2012, especially since the 2018 revolution, the country has taken steps to counter corruption. Further mentioning that "Armenia has taken a gradual approach to reform, resulting in steady and positive improvements in anti-corruption. However, safeguarding judicial independence and ensuring checks and balances remain critical first steps in its anti-corruption efforts. The effectiveness of those efforts is additionally challenged by the current political and economic crisis as a result of the recent Nagorno Karabakh conflict and the subsequent protests against Prime Minister Nikol Pashinyan over a ceasefire deal".
In 2008, Transparency International reduced its Corruption Perceptions Index for Armenia from 3.0 in 2007Global Corruption Report 2008, Transparency International, Chapter 7.4, p. 225. to 2.9 out of 10 (a lower score means more perceived corruption); Armenia slipped from 99th place in 2007 to 109th out of 180 countries surveyed (on a par with Argentina, Belize, Moldova, Solomon Islands, and Vanuatu).2008 CORRUPTION PERCEPTIONS INDEX , Transparency International, 2008.
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Politics of Armenia
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See also
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See also
Constitution of Armenia
Constitutional economics
Elections in Armenia
Foreign relations of Armenia
List of political parties in Armenia
Politics of Artsakh
Programs of political parties in Armenia
Rule according to higher law
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Politics of Armenia
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Notes
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Notes
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Politics of Armenia
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References
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References
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Politics of Armenia
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External links
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External links
Global Integrity Report: Armenia has information on anti-corruption efforts
Petrosyan, David: "The Political System of Armenia: Form and Content" in the Caucasus Analytical Digest No. 17
Control Chamber of The Republic of Armenia
Armenian language document
National Assembly of the Republic of Armenia | Official Web Site | parliament.am
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Politics of Armenia
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Table of Content
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Short description, History, Transition to a parliamentary republic, Government, Legislative branch, Political parties and elections, Latest national elections, Latest presidential elections, Independent agencies, Corruption, See also, Notes, References, External links
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Economy of Armenia
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Short description
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The economy of Armenia grew by 12.6% in 2022, according to the country's Statistical Committee and the International Monetary Fund. Total output amounted to 8.5 trillion Armenian drams, or $19.5 billion. At the same time, Armenia's foreign trade turnover significantly accelerated in growth from 17.7% in 2021 to 68.6% in 2022.https://www.armstat.am/file/article/sv_12_22a_411.pdf
GDP contracted sharply in 2020 by 7.2%, mainly due to the COVID-19 recession and the war against Azerbaijan. In contrast it grew by 7.6 per cent in 2019, the largest recorded growth since 2007, while between 2012 and 2018 GDP grew 40.7%, and key banking indicators like assets and credit exposures almost doubled.
While part of the Soviet Union, the economy of Armenia was based largely on manufacturing industry—chemicals, electronic products, machinery, processed food, synthetic rubber and textiles; it was highly dependent on outside resources. Armenian mines produce copper, zinc, gold and lead. The vast majority of energy is produced with imported fuel from Russia, including gas and nuclear fuel for Armenia's Metsamor nuclear power plant. The main domestic energy source is hydroelectric. Small amounts of coal, gas and petroleum have not yet been developed.
The severe trade imbalance has been somewhat offset by international aid and remittances from Armenians abroad, and foreign direct investment. Armenia is a member of the Eurasian Economic Union and ties with Russia remain close, especially in the energy sector.
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Economy of Armenia
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Overview
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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. Armenia began borrowing soon after declaring independence. In 2000, Armenian governmental debt reached its greatest level relative to GDP (49.3 percent of GDP).
Armenia is a food importer, and its mineral deposits (gold and 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. Political instability and the threat of war placed a significant strain on economic development. Despite robust growth in recent years, the problem of geopolitical uncertainty resurfaced during the 2020 war, contributing to a 7.2% drop in GDP. Armenia's public debt rose to 67.4% in 2020, but fell below 50% again in 2022.
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Economy of Armenia
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Global competitiveness
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Global competitiveness
In the 2020 report of Index of Economic Freedom by The Heritage Foundation, Armenia is classified as "mostly free" and ranks 34th, improving by 13 positions and ahead of all other Eurasian Economic Union countries and several EU countries including Cyprus, Bulgaria, Romania, Poland, Belgium, Spain, France, Portugal and Italy.
In the 2019 report (data for 2017) of Economic Freedom of the World published by Fraser Institute Armenia ranks 27th (classified most free) out of 162 economies.
In the 2019 report of Global Competitiveness Index Armenia ranks 69th out of 141 economies.
In the 2020 report (data for 2019) of Doing Business Index Armenia ranks 47th with 10th rank on "starting business" sub-index.
In the 2019 report (data for 2018) of Human Development Index by UNDP Armenia ranked 81st and is classified into "high human development" group.
In the 2021 report (data for 2020) of Corruption Perceptions Index by Transparency International Armenia ranked 49 of 179 countries.
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Economy of Armenia
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History of the modern Armenian economy
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History of the modern Armenian economy
At the beginning of the 20th century, the territory of present-day Armenia was an agricultural region with some copper mining and cognac production. From 1914 through 1921, Caucasian Armenia suffered from the genocide of about 1.5 million Armenian inhabitants in their own homeland which caused total property and financial collapse when all of their assets and belongings were forcibly taken away by the Turks, the consequences of which after 105 years to this day remain incalculable, revolution, the influx of refugees from Turkish Armenia, disease, hunger and economic misery. About 200,000 people died in 1919 alone. At that point, only American relief efforts saved Armenia from total collapse. Thus, Armenians went from being one of the wealthiest ethnic groups in the region to suffering from poverty and famine. Armenians were the second richest ethnic group in Anatolia after the Greeks, and they were heavily involved in very high productive sectors such as banking, architecture, and trade. However, after the mass killings of Armenian intellectuals in April 1915 and the genocide targeted towards the whole Armenian population left the people and the country in ruins. The genocide was responsible for the loss of many high-quality skills that the Armenians possessed.
thumbnail|100 million rubles banknote
The first Soviet Armenian government regulated economic activity stringently, nationalizing all economic enterprises, requisitioning grain from peasants, and suppressing most private market activity. This first experiment of state control ended with the advent of Soviet leader Vladimir Lenin's New Economic Policy (NEP) of 1921–1927. This policy continued state control of the large enterprises and banks, but peasants could market much of their grain, and small businesses could function. In Armenia, the NEP years brought partial recovery from the economic disaster of the post-World War I period. By 1926 agricultural production in Armenia had reached nearly three-quarters of its prewar level.
By the end of the 1920s, Stalin's regime had revoked the NEP and re-established the centralised state monopoly on all economic activity. Once this occurred, the main goal of the Soviet economic policy in Armenia was to turn a predominantly agrarian and rural republic into an industrial and urban one. Among other restrictions, peasants now were forced to sell nearly all of their output to state procurement agencies rather than at the open market. From the 1930s through the 1960s, an industrial infrastructure has been constructed. Besides hydroelectric plants and canals, roads were built and gas pipelines were laid to bring fuel and food from Azerbaijan and Russia.
The state socialist command economy, in which market forces were suppressed and all orders for production and distribution came from the state authorities, survived in all its essential features until the fall of the Soviet regime in 1991. In the early stages of the communist economic revolution, Armenia underwent a fundamental transformation into a "proletarian" society. Between 1929 and 1939, the percentage of Armenia's work force categorised as industrial workers grew from 13% to 31%. By 1935 industry supplied 62% of Armenia's economic production. Highly integrated and sheltered within artificial barter economy of the Soviet system from the 1930s until the end of the communist era, the Armenian economy showed few signs of self-sufficiency at any time during that period. In 1988, Armenia produced only 0.9% of the net material product of the Soviet Union (1.2% of industry, 0.7% of agriculture). The republic retained 1.4% of total state budget revenue, delivered 63.7% of its NMP to other republics, and exported only 1.4% of what it produced to markets outside the Soviet Union.
Agriculture accounted for only 20% of net material product and 10% of employment before the breakup of the Soviet Union in 1991.
Armenia's industry was especially dependent on the Soviet military-industrial complex. About 40% of all enterprises in the republic were devoted to defense, and some factories lost 60% to 80% of their business in the last years of the Soviet Union, when massive cuts were made in the national defense expenditures. As the republic's economy faced the prospects of competing in world markets in the mid-1990s, the great liabilities of Armenia's industry were its outdated equipment and infrastructure and the pollution emitted by many of the country's heavy industrial plants.
The economic downturn that began in 1989 worsened dramatically in 1992. According to statistics, the GDP declined by 37.5 percent in 1991 compared to 1990, and all sectors contributing to the GDP decreased in production. The collapse of industry in favor of agriculture, whose products were mostly imported throughout the Soviet period, changed the structure of sectoral contributions to GDP.
In 1991, Armenia's last year as a Soviet republic, national income fell 12% from the previous year, while per capita gross national product was 4,920 rubles, only 68% of the Soviet average. In large part due to the earthquake of 1988, the Azerbaijani blockade that began in 1989 and the collapse of the international trading system of the Soviet Union, the Armenian economy of the early 1990s remained far below its 1980 production levels. In the first years of independence (1992–93), inflation was extremely high, productivity and national income dropped dramatically, and the national budget ran large deficits.
A period of chronic shortages, was the first stage of price deregulation, which allowed goods to stay in Armenia as opposed to being exported for better prices; the inflation rates were 10 percent in 1990, 100 percent in 1991, and 642.5 percent during the first four months of 1992, compared with the first four months of 1991. Thus, there were two opposing dynamics: price increases in response to shortages and falling incomes due to the recession and unemployment.
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Economy of Armenia
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Post-communist economic reforms
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Post-communist economic reforms
Armenia introduced elements of the free market and privatisation into their economic system in the late 1980s, when Mikhail Gorbachev began advocating economic reform. To supply the country's basic needs, the first decision was land reform and the privatization of land. This allowed for the emergence of small-parcel agriculture supplying markets and supporting self-sustenance during the period of shortages. Cooperatives were set up in the service sector, particularly in restaurants, although substantial resistance came from the Communist Party of Armenia (CPA) and other groups that had enjoyed privileged position in the old economy. In the late 1980s, much of Armenia's economy already was opening either semi-officially or illegally, with widespread corruption and bribery. The so-called mafia, made up of interconnected groups of powerful officials and their relatives and friends, sabotaged the efforts of reformers to create a lawful market system. When the December 1988 earthquake brought millions of dollars of foreign aid to the devastated regions of Armenia, much of the money went to corrupt and criminal elements.
Beginning in 1991, the democratically elected government pushed vigorously for privatisation and market relations, although its efforts were frustrated by the old ways of doing business in Armenia, the Azerbaijani blockade, and the costs of the First Nagorno-Karabakh War. In 1992, the Law on the Programme of Privatisation and Decentralisation of Incompletely Constructed Facilities established a state privatisation committee, with members from all political parties. In the middle of 1993, the committee announced a two-year privatisation programme, whose first stage would be privatisation of 30% of state enterprises, mostly services and light industries. The remaining 70%, including many bankrupt, nonfunctional enterprises, were to be privatised in a later stage with a minimum of government restriction, to encourage private initiative. For all enterprises, the workers would receive 20% of their firm's property free of charge; 30% would be distributed to all citizens by means of vouchers; and the remaining 50% was to be distributed by the government, with preference given to members of the labour organisations. A major problem of this system, however, was the lack of supporting legislation covering foreign investment protection, bankruptcy, monopoly policy, and consumer protection.
In the first post-communist years, efforts to interest foreign investors in joint enterprises were only moderately successful because of the blockade and the energy shortage. Only in late 1993 was a department of foreign investment established in the Ministry of Economy, to spread information about Armenia's investment opportunities and improve the legal infrastructure for investment activity. A specific goal of this agency was creating a market for scientific and technical intellectual property.
A few Armenians living abroad made large-scale investments. Besides a toy factory and construction projects, diaspora Armenians built a cold storage plant (which in its first years had little produce to store) and established the American University of Armenia in Yerevan to teach the techniques necessary to run a market economy.
Armenia was admitted to the International Monetary Fund in May 1992 and to the World Bank in September. A year later, the government complained that those organisations were holding back financial assistance and announced its intention to move toward fuller price liberalisation, and the removal of all tariffs, quotas, and restrictions of foreign trade. Although privatisation had slowed because of catastrophic collapse of the economy, Prime Minister Hrant Bagratyan informed the United States officials in the fall of 1993 that plans had been made to embark on a renewed privatisation programme by the end of the year.
Like other former states, Armenia's economy suffers from the legacy of a centrally planned economy and the breakdown of former Soviet trading patterns. Soviet investment in and support of Armenian industry has virtually disappeared, so that few major enterprises are still able to function. In addition, the effects of the 1988 earthquake, which killed more than 25,000 people and made 500,000 homeless, are still being felt. Although a cease-fire has held since 1994, the conflict with Azerbaijan over Nagorno-Karabakh has not been resolved. The consequent blockade along both the Azerbaijani and Turkish borders has devastated the economy, because of Armenia's dependence on outside supplies of energy and most raw materials. Land routes through Azerbaijan and Turkey are closed; routes through Georgia and Iran are adequate and reliable. In 1992–93, the GDP had fallen nearly 60% from its 1989 level. The national currency, the dram, suffered hyperinflation for the first few years after its introduction in 1993.
Armenia has registered strong economic growth since 1995 and inflation has been negligible for the past several years. New sectors, such as precious stone processing and jewelry making and communication technology (primarily Armentel, which is left from the USSR era and is owned by external investors). This steady economic progress has earned Armenia increasing support from international institutions. The International Monetary Fund (IMF), World Bank, EBRD, as well as other international financial institutions (IFIs) and foreign countries are extending considerable grants and loans. Total loans extended to Armenia since 1993 exceed $800 million. These loans are targeted at reducing the budget deficit, stabilizing the local currency; developing private businesses; energy; the agriculture, food processing, transportation, and health and education sectors; and ongoing rehabilitation work in the earthquake zone.
By 1994, however, the Armenian government had launched an ambitious IMF-sponsored economic liberalization program that resulted in positive growth rates in 1995–2005. The economic growth of Armenia expressed in GDP per capita was one of strongest in the CIS. GDP went from $350 to more than $800 on average between 1995 and 2003. Three principal factors explain this result: the credibility of the macroeconomic policies of stabilization, the correction effect following the depression, and the importance of external transfers, in particular since 2000. Armenia became a member of the World Trade Organization (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 the Metsamor nuclear plant, which is under international pressure to close due to its old design. The European Union had classified the VVER 440 Model V230 light-water-cooled reactors as the "oldest and least reliable" category of all the 66 Soviet reactors built in the former Eastern Bloc. However the IAEA has found that the Metsamor NPP has adequate safety and can function beyond its design lifespan.
The country's electricity distribution system was privatized in 2002.
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Economy of Armenia
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Outperforming GDP growth
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Outperforming GDP growth
alt=|thumb|upright 1.2|GDP growth rates in Armenia and some neighboring countries and some regions in years 2010–2017
According to official preliminary data GDP grew by 7.6 per cent in 2019, largest recording growth since 2008.
Nominal GDP per capita was approximately $4,196 in 2018 and is expected to reach $8,283 in 2023, surpassing neighbouring Azerbaijan and Georgia.
With 8.3%, Armenia recorded highest degree of GDP growth among Eurasian Economic Union countries in 2018 January–June against the same period of 2017.
The economy of Armenia had grown by 7.5% in 2017 and reached a nominal GDP of $11.5 billion per annum, while per capita figure grew by 10.1% and reached $3880. With 7.29% Armenia was second best in GDP per capita growth terms in Europe and Central Asia in 2017.
Armenian GDP PPP (measured in current international dollar) grew total of 316% per capita in 2000–2017, sixth-highest worldwide.
GDP grew 40.7% between 2012 and 2018, and key banking indicators like assets and credit exposures almost doubled.
thumb|upright 1.2|GDP (PPP) per capita of Armenia, Azerbaijan and Georgia in years 1994–2022, IMF data.
Year GDP (millions of drams) GDP Growth GDP per capita (drams)GDP deflator 2000 +5.9% −1.4% 2001 +9.6% +4.1% 2002 +13.2% +0.7% 2003 +14.0% +4.6% 2004 +10.5% +6.3% 2005 +13.9% +3.2% 2006 +13.2% +4.6% 2007 +13.7% +4.2% 2008 +6.9% +5.9% 2009 −14.1% +2.6% 2010 +2.2% +7.8% 2011 +4.7% +4.2% 2012 +7.2% -1.2% 2013 +3.3% +3.4% 2014 +3.6% +2.3% 2015 +3.0% +1.2%20165,067,293.5 +0.2% +0.3%20175,564,493.3 +7.5% +2.1%20186,017,035.2 +5.2% +2.8%20196,543,321.8 +7.6% +1.0%20206,181,664.1 -7.5% +2.0% 2021 +5.8% +6.9% 2022 +12.6% +8.0% 2023 +8.7% +2.8%
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Economy of Armenia
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Regional GDP
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Regional GDP
This is a list of provinces of Armenia by nominal GDP shown in Armenian dram and US$. Statistics shown are for 2017.
RankRegionGDP (bil. ֏)GDP (bil. US$)GDP per capita (֏)GDP per capita (US$)13,032.4546.2862,816,4335,8382Ararat Province381.6590.7911,478,7273,0653Kotayk Province346.8430.7191,375,2702,8514Armavir Province340.6040.7061,284,3272,6625Syunik Province335.2380.6952,417,0015,0106Lori Province276.9310.5741,263,3722,6197Shirak Province238.0010.4931,002,9542,0798Gegharkunik Province224.2410.465974,1182,0199Aragatsotn Province175.2290.3631,371,1212,84210Tavush Province118.6570.246956,9081,98411Vayots Dzor Province94.6360.1961,892,7163,9245,564.49311.5351,867,6563,872
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Economy of Armenia
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2020 recession
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2020 recession
The Armenian economy performed poorly in 2020, and contracted by 7.2% after years of consecutive growth. The two biggest contributing factors were the COVID-19 recession and the Second Nagorno-Karabakh War. In the first half of 2020, the Armenian economy was negatively impacted by the economic restrictions that were implemented in response to the COVID-19 pandemic. These restrictions included a stay-at-home order, an indoor social distancing requirement, and a mask mandate. These restrictions had a negative impact on businesses; according to the World Bank, individual consumption dropped by 9% in the first six months of 2020 due to the stay-at-home order.
The economy was further impacted by the war against Azerbaijan later in the year.
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Economy of Armenia
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Main sectors of economy
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Main sectors of economy
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Economy of Armenia
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Agricultural sector
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Agricultural sector
Armenia produced in 2018:
415 thousand tons of potatoes;
199 thousand tons of vegetables;
187 thousand tons of wheat;
179 thousand tons of grapes;
138 thousand tons of tomatoes;
126 thousand tons of watermelons;
124 thousand tons of barley;
109 thousand tons of apples;
104 thousand tons of apricots (12th-largest world producer);;
89 thousand tons of cabbages;
54 thousand tons of sugar beet;
52 thousand tons of peaches;
50 thousand tons of cucumbers;
39 thousand tons of onions;
In addition to smaller productions of other agricultural products.
thumb|left|Cornelian cherries, figs, pears, peaches and apples sold at a market in Yerevan are among a few of Armenian agricultural products
As of 2010, the agricultural production comprises on average 25 percent of Armenia's GDP. In 2006, the agricultural sector accounted for about 20 percent of Armenia's GDP."Kocharian Orders Tax Exemption For Armenian Farmers", Armenia Liberty (RFE/RL), August 8, 2006.
Armenia's agricultural output dropped by 17.9 percent in the period of January–September 2010. This was owing to bad weather, a lack of a government stimulus package, and the continuing effects of decreased agricultural subsidies by the Armenian government (per WTO requirements). In addition, the share of agriculture in Armenia's GDP hovered around 17.9% until 2012 according to the World Bank. Then already in 2013 the share of it was a bit higher comprising 18.43%. Afterwards a declining trend was registered in the period of 2013-2017 reaching to around 14.90% in 2017. By comparing the share of agriculture as a component of GDP with the neighboring countries (Georgia, Azerbaijan, Turkey, Iran) one can notice that the percentage is highest for Armenia. As of 2017 the contribution of agriculture to the GDP for the neighboring countries was 6.88, 5.63, 6.08 and 9.05 respectively.
In 2022, the industry with the highest number of companies registered in Armenia is Services with 1,907 companies followed by Wholesale Trade and Manufacturing with 510 and 408 companies respectively.
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Economy of Armenia
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Mining
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Mining
thumb|Armenia's largest mine, the Kajaran copper-molybdenum open-pit mine in southern Armenia
In 2017, mining industry output with grew by 14.2% to 172 billion AMD at current prices and run at 3.1% of Armenia's GDP.
In 2017, mineral product (without precious metals and stones) exports grew by 46.9% and run at US$692 million, which comprised 30.1% of all exports.
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Economy of Armenia
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Construction sector
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Construction sector
Real estate transactions count grew by 36% in September 2019 compared to September 2018. Also, the average market value of one square meter of housing in apartment buildings in Yerevan in September 2019 grew by 10.8% from September 2018.
In 2017, construction output increased by 2.2% reaching 416 billion AMD.
Armenia experienced a construction boom during the latter part of the 2000s. According to the National Statistical Service, Armenia's booming construction sector generated about 20 percent of Armenia's GDP during the first eight months of 2007."Armenian Growth Still In Double Digits", Armenia Liberty (RFE/RL), September 20, 2007. According to a World Bank official, 30 percent of Armenia's economy in 2009 came from the construction sector.
However, during the January to September 2010 period, the sector experienced a 5.2 percent year-on-year decrease, which according to the Civilitas Foundation is an indication of the unsustainability of a sector based on an elite market, with few products for the median or low budgets. This decrease comes despite the fact that an important component of the government stimulus package was to support the completion of ongoing construction projects.
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Economy of Armenia
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Energy
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Energy
In 2017, electricity generation increased by 6.1% reaching 7.8 billion KWh.
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Economy of Armenia
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Digital economy
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Digital economy
The digital economy is a branch of the economy based on digital computing technologies. The digital economy is sometimes referred to as the Internet economy or the web economy. The digital economy is often intertwined with the traditional economy, making it difficult to distinguish between them. Aimed at the sector's development on November 15, 2021, the Silicon Mountains Summit dedicated to introducing intelligent solutions in the economy was held in Yerevan. The main topic of the summit was the prospect of digitalization of the economy in Armenia. The main driving force of this sphere in Armenia is the banks. Digital transformation is a necessity for banks and financial institutions. At the moment, ACBA Bank is the leader․
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Economy of Armenia
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Industrial sector
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Industrial sector
In 2017, industrial output increased by 12.6% annually reaching 1661 billion AMD.
Industrial output was relatively positive throughout 2010, with year-on-year average growth of 10.9 percent in the period January to September 2010, due largely to the mining sector where higher global demand for commodities led to higher prices. According to the National Statistical Service, during the January–August 2007 period, Armenia's industrial sector was the single largest contributor to the country's GDP, but remained largely stagnant with industrial output increasing only by 1.7 percent per year. In 2005, Armenia's industrial output (including electricity) made up about 30 percent of GDP."Government Downplays Economic Cost Of Russian Gas Price Hike" , Armenia Liberty (RFE/RL), February 10, 2006.
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Economy of Armenia
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Services sector
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Services sector
In the 2000s, along with the construction sector, the services sector was the driving force behind Armenia's recent high economic growth rate.
Between 2017 and 2019, Armenia's economy increased fast, with annual rate of GDP growth averaging 6.8 percent. Following the political realignment of 2018, prudent macroeconomic policy helped develop a track record of macroeconomic stability and an enhanced business environment. In Armenia, the service sector in 2020 reduced volumes by 14.7%, against 15% growth a year earlier, amounting to 1.7 trillion drams ($3.5 billion). According to the Statistical Committee, a negative trend was recorded in all service segments except finance, as well as information and communication.
thumb|Headquarters of VivaCell MTS, Armenia's leading mobile services provider
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Economy of Armenia
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Retail trade
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Retail trade
In 2010, retail trade turnover was largely unaltered compared to 2009. The existing monopolies throughout the retail sector have made the sector non-responsive to the crisis and resulted in near zero growth. The aftermath of the crisis has started to shift the structure in the retail sector in favor of food products.
Nowadays(2019), Armenia has improved standards of living and growing income, which brought to the improvement of retail sector in Armenia. retail sector has the highest employment level. While the sector improves, currently the major sector is still in Yerevan, and not in the other cities of Armenia. The development that happened in this sector was the opening of Dalma Garden Mall, and later Yerevan mall, Rio mall and Rossia mall, which dramatically increased the quality of retail in Yerevan. Currently there is a new development, as in Gyumri there is a new mall opened called Shirak Mall. Another reason for the development of the retail is the development that happened in the banking industry. Today people can easily get financial assistance from the banks right to their credit cards, without visiting the bank.
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Economy of Armenia
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Information and Communication Technologies
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Information and Communication Technologies
As of February 2019 nearly 23 thousand employees were counted in ICT sector. With 404 thousand AMD they enjoyed highest pay rate among surveyed sectors of economy. Average salaries in pure IT sector (excluding communications sub-sector) stood at 582 thousand AMD.
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Economy of Armenia
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Financial Services
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Financial Services
In January 2019 there were 20.5 thousand employees registered in the financial sector.
According to Moody's, robust economic growth will benefit banks with GDP growth remaining robust at around 4.5% in 2019–20.
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Development of Financial Services in 2017 according to CBA reportFinancial Services Segments20172016Banking systemNet profit39.7 billion AMD31.7 billion AMDReturn on assets (ROA)1.0%0.9%Return on equity (ROE)6.0%5.8%Assets growth rate9.2%Total capital growth rate4.9%Liabilities growth rate10.1%Loans provided to businesses growth rate8.5%General liquidity normative indicator (minimum 15%)32.1%Ongoing liquidity normative indicator (minimum 60%)141.7%Credit organizationsAssets growth rate21.1%Total capital growth rate41.4%Liabilities growth rate3.5%Insurance systemAssets growth rate6.1%Total capital growth rate –11%Liabilities growth rate11.2%Investment companiesAssets growth rate54.8%Total capital growth rate51.9%Liabilities growth rate55.3%Mandatory pension fundsNet assets growth rate67.0%Net assets105.6 billion AMD
Industry report on banking sector prepared by AmRating presents slightly varying figures for some of above data.
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Economy of Armenia
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Tourism
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Tourism
thumb|Grand Hotel Yerevan, established in 1926
Tourism in Armenia has been a key sector to the Armenian economy since the 1990s when tourist numbers exceeded half a million people visiting the country every year (mostly ethnic Armenians from the Diaspora). The Armenian Ministry of Economy reports that most international tourists come from Russia, EU states, the United States and Iran. Though relatively small in size, Armenia has three UNESCO world heritage sites.
Despite internal and external problems, the number of incoming tourists has been continually increasing. 2018 saw a record high of over 1.6 million inbound tourists.
In 2018 receipts from international tourism amounted to $1.2 billion, nearly twice the value for 2010. In per capita terms these stood at $413, ahead of Turkey and Azerbaijan, but behind Georgia.
In 2019 the largest growth at 27.2% was shown by accommodation and catering sector, which came as a result of the growth of tourist flows.
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Economy of Armenia
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Financial system
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Financial system
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Economy of Armenia
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Foreign debt
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Foreign debt
The amount of interest paid on the public debt rose significantly (from AMD 11 billion in 2008 to AMD 46.5 billion in 2013), as did the amount of principle repayments (from annual repayments of US$15–16 million in 2005-2008 exceeding US$150 million in 2013). This is a significant financial load on the state budget. Because of additional borrowings and lower concessionality of new loans, the burden might rise in the future years.
In 2019, the Armenian government planned to obtain about $490 million in fresh loans rising public debt to about $7.5 billion. Just over $6.9 billion of that would be the government's debt.
After reaching nearly 60.0 per cent of GDP, the public debt to GDP ratio decreased by approximately three percentage points in 2018 compared with a year before and stood at 55.7 per cent at the end of 2018.
The government's public debt at the end of 2019 stood at $6.94 billion, making 50.3% of its GDP.
In March 2019 sovereign debt was $5488 million, $86.5 million (about 2%) less than a year ago.
Other sources quote Armenia's debt at $10.8 billion in September 2018, possibly including non-public debt too.
In 2018 debt-to-GDP ratio stood at 55.7% down from 58.7% in 2017.
Armenia revised the country's fiscal rules in 2018, setting a permissible threshold for public debt in the amount of 40, 50 and 60% of GDP. At the same time, it established that in case of force majeure situations such as natural disasters, wars, the government will be allowed to exceed this threshold.
The debt rose by $863.5 million in 2016 and by another $832.5 million in 2017. It totalled just $1.9 billion before the 2008-2009 (13.5% of GDP) global financial crisis that plunged the county into a severe recession.
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Economy of Armenia
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Exchange rate of national currency
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Exchange rate of national currency
National Statistics Office publishes official reference exchange rates for each year.
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Economy of Armenia
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Inflation
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Inflation
For 2023 the IMF forecasts inflation at 3.5%, which is below most neighbouring countries.
The Armenian government projects inflation at 2.7% in 2019.
The inflation rate in Armenia in 2020 was 1.21 percent, a 0.23 percent decrease over 2019, in 2019 was 1.44 percent, a 1.08 percent decrease over 2018, in 2018 was 2.52 percent, up 1.55 percent from 2017 and in 2017 was 0.97 percent, a 2.37 percent rise from 2016.
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Economy of Armenia
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Cash remittances
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Cash remittances
thumb|Central Bank of Armenia's Educational Center in Dilijan
Cash remittances from Armenians working abroad — mostly in Russia and the United States — contribute significantly to Armenia's Gross Domestic Product making up 14% of GDP in 2018. They help Armenia sustain double-digit economic growth and finance its massive trade deficit.
In 2008 transfers reached record high of $2.3 billion. In 2015 they reached 10-year low at $1.6 billion. In 2018, they run at round $1.8 billion. $0.8 billion were transferred in first half of 2019. According to CBA their impact on economy is decreasing, as GDP grows at outperforming rate.
Net private transfers decreased in 2009, but saw a continuous increase during the first six months of 2010. Since private transfers from the Diaspora tend to be mostly injected into consumption of imports and not in high value-added sectors, the transfers have not resulted in sizeable increases in productivity.
According to the Central Bank of Armenia, during the first half of 2008, cash remittances sent back to Armenia by Armenians working abroad rose by 57.5 percent and totaled US$668.6 million, equivalent to 15 percent of the country's first-half Gross Domestic Product."Cash Transfers To Armenia Jump To New High" , Armenia Liberty (RFE/RL), August 5, 2008. However, the latter figures only represent cash remittances processed through Armenian commercial banks. According to RFE/RL, comparable sums are believed to be transferred through non-bank systems, implying that cash remittances make up approximately 30 percent of Armenia's GDP in the first half of 2008.
In 2007 cash remittances through bank transfers rose by 37 percent to a record-high level of US$1.32 billion. According to the Central Bank of Armenia, in 2005, cash remittances from Armenians working abroad reached a record-high level of $1 billion, which is worth more than one fifth of the country's 2005 GDP."Survey Highlights Armenia’s Lingering Unemployment" , Armenia Liberty (RFE/RL), February 9, 2006.
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Economy of Armenia
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Banking
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Banking
thumb|Ameriabank headquarters in Yerevan
The central bank has set additional capital buffers in the banking sector. In force since April 2019, the regulator set three buffers exceeding the current capital adequacy requirement compliant with the Basel III regulation: a capital conservation buffer, a counter-cyclical capital buffer and a systemic risk buffer. Full implementation of the buffers over the course of the next few years will strengthen the financial sector's resistance to economic shocks and help increase the efficiency of macroprudential policies.
Armenian banks' lending grew by 10 percent in 2019.
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Economy of Armenia
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Microfinance
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Microfinance
The establishment of Microfinance institutions in Armenia was dependent on them making a complementary effort to fill the gap in the financial services sector. Its primary goal was to deal with the rising unemployment and poverty brought on by transitory shock. In this context, self-employment in the country emerged as one of the best options to unemployment. Commercial banking institutions in Armenia overlooked micro-business enterprises that lacked credit histories and sufficient funding. Microfinance has been proposed as an adaptable instrument to assist people in transition economies take advantage of new opportunities.
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Economy of Armenia
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Government revenues and taxation
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Government revenues and taxation
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Economy of Armenia
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Government revenues
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Government revenues
In August 2019 Moody's Investors Service upgraded Armenia to Ba3 rating with stable outlook.
According to the National Statistical Service, Armenia's government debt stood at AMD 3.1 trillion (about $6,4 billion, including $5,1 billion of external debt) as of November 30, 2017. Armenia's debt-to-GDP ratio will drop by 1% in 2018 according to finance minister.
In Armenia's external debt ($5.5 billion as of January 1, 2018), the arrears for multi-country credit programs dominate – 66.2% or $3.6 billion, followed by debt on bilateral loan programs - 17.5% or $958.9 million and investments of non-residents in Armenian Eurobonds – 15,4% or $844.9 million.
For the whole Armenian economy and international commerce, 2020 was a year of decline. In a variety of areas Armenian commodities are being exported and imported at a lower rate. According to the Armenian Statistical Committee, Armenia exported goods worth $2.544 billion in 2020, a fall of 3.9 percent from 2019. Armenia imported items worth 4.559 billion dollars in 2020, down 17.7% from the previous year.The volume of Armenia's international trade has varied throughout the previous 10 years.
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Economy of Armenia
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Taxation
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Taxation
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Economy of Armenia
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Employee income tax
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Employee income tax
From January 1, 2020, Armenia will switch to a flat income taxation system, which, regardless of the amount will tax wages at 23%. Moreover, until 2023 the taxation rate will gradually decrease from 23% to 20%.
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Economy of Armenia
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Corporate income tax
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Corporate income tax
The reform adopted in June 2019 aims to boost medium-term economic activity and to increase tax compliance. Among other measures, the corporate income tax was reduced by two percentage points to 18.0 per cent and the tax on dividends for non-resident organisations halved to 5.0 per cent.
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Economy of Armenia
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Special taxation for small business
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Special taxation for small business
From January 1, 2020, the republic will abandon two alternative tax systems - self-employed and family entrepreneurship. They will be replaced by micro-entrepreneurship with a non-taxable threshold of up to 24 million drams. Business entities that carry out specialized activities, in particular, accounting, advocacy, and consulting will not be considered as micro-business entities. Micro business will be exempted from all types of taxes other than income tax, which will be 5 thousand drams per employee.
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Economy of Armenia
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Value-added tax
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Value-added tax
Over half of the tax revenues in January–August 2008 were generated from value-added taxes (VAT) of 20%. By comparison, corporate profit tax generated less than 16 percent of the revenues."Government Keeps Up Strong Growth In Tax Revenues" , Armenia Liberty (RFE/RL), October 14, 2008. This suggests that tax collection in Armenia is improving at the expense of ordinary citizens, rather than wealthy citizens (who have been the main beneficiaries of Armenia's double-digit economic growth in recent years).
VAT (Value Added Tax): In Armenia, VAT-paying individuals subtract the VAT paid on their inputs from the VAT levied on their sales and account to the tax authorities for the difference. The standard rate of VAT on domestic sales of goods and services, as well as imports importation, is 20%. Exports of products and services are not taxed.
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Economy of Armenia
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Foreign trade, direct investments, and aid
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Foreign trade, direct investments, and aid
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Economy of Armenia
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Foreign trade
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Foreign trade
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Economy of Armenia
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Exports
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Exports
According to the National Statistical Committee, in 2018, exports amounted to $2.411.9 billion, having grown by 7.8% from the previous year. After a boom of almost 93% in 2022, the IMF expects exports of goods and services to grow by 22% in 2023 and 8% in 2024.
The goods export structure changed considerably in 2018 as the export of the traditional mining sector decreased while the share of textiles, agriculture and precious metals increased.
Geographical location of the country and relatively low electricity costs are comparative advantages supporting to boost the production of the textile and leather products in Armenia. Proximity to Europe in comparison with manufacturers in East Asia creates opportunity to strengthen Armenia's position as contract manufacturing destination for European brands. Foreign companies that put orders to Armenian companies are mainly famous European brands, particularly, from Italy (La Perla, SARTIS, VERSACE etc.) and Germany (LEBEK International Fashion, KUBLER Bekleidungswerk). With the Armenia's entry into Eurasian Economic Commission, the opportunity to increase its presence with textile and leather production raised also in the countries of Eurasian Economic Commission as no customs duty applies to Armenian products in the export markets within the customs union.
According to the study "Regional and International Trade of Armenia", authors investigated the trade potential of Armenia for different product groups by employing a gravity model of trade approach. The study explored Armenia's trade flows to 139 countries for the period of 2003 to 2007. According to the results of the paper, the authors concluded that "Armenia has exceeded its export potential almost with all the CIS countries". In addition, the authors concluded that the most perspective product groups of Armenian export tend to be "Industrial products", "Food and beverages" and "Consumer goods". On the other hand, the paper "The effects of exchange rate volatility on exports: evidence from Armenia" analyzes the effect of Armenian floating exchange rate regime and exchange rate volatility on Armenian exports to Russia. According to the paper exchange rate volatility has long-run and short-run negative effects on exports. Moreover, authors stated that high exchange rate risk resulted in decreasing exports to Russia.
According to most recent (2019 Jan-Feb compared to 2018 Jan-Feb) ArmStat calculations, biggest growth in export quantities was measured towards Turkmenistan by 23.6 times (from $37K to $912K), Estonia by 15 times (from $8.4K to $136.5K) and Canada by 11.5 times (from $623K to $7.8 mln). Meanwhile, exports to Russia, Germany, USA and UAE dropped.
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Economy of Armenia
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Imports
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Imports
In 2017 Armenia imported $3.96B, making it the 133rd largest importer in the world. During the last five years the imports of Armenia have decreased at an annualized rate of -1.2%, from $3.82B in 2012 to $3.96B in 2017. The most recent imports are led by Petroleum Gas which represent 8.21% of the total imports of Armenia, followed by Refined Petroleum, which account for 5.46%. Armenia's main imports are oil, natural gas, cereals, rubber manufactures, cork and wood, and electrical machinery. Armenia's main imports partners are Russia, China, Ukraine, Iran, Germany, Italy, Turkey, France and Japan.
The European Union (28.7% of total exports), Russia (26.9%), Switzerland (14.1%), and Iraq (14.1%) are Armenia's largest export partners (6.3 percent ). The Russian Federation is the most important import partner (26.2%), followed by the EU (22.6%), China (13.8%), and Iran (13.8%). (5.6 percent ). After the 2008 Russian-Georgian conflict, which briefly halted the nation's hydrocarbon supply and exposed the country's energy vulnerabilities, the country has been looking for other energy sources. Tensions with its neighbors, notably Azerbaijan and Turkey, continue to exist, affecting commerce. Armenia's ties to Russia, as well as its membership in the Eurasian Economic Union, constrain the country's potential to integrate further with the EU.
Imports in 2017 amounted to $4.183 billion, up 27.8% from 2016.
In 2018 the country's structural trade imbalance was predicted to be 15.7 percent of GDP (World Bank). According to World Trade Organization data, Armenia exported commodities worth US$2.4 billion in 2018, up 7% from the previous year, and imported goods worth US$4.9 billion, up 18%. In terms of services, the country exported US$2 billion in 2018 and imported US$2.1 billion.
The global economic crisis has had less impact on imports because the sector is more diversified than exports. In the first nine months of 2010, imports grew about 19 percent, just about equal to the decline of the same sector in 2009.
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Economy of Armenia
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Deficit
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Deficit
According to the National Statistical Service foreign trade deficit amounted to US$1.94 billion in 2017.
The current account deficit represented 2.4 percent of GDP in 2017 and increased up to 8.1 percent of GDP during the first three quarters of 2018. This was a result of about 8 percent increase in goods export and 21 percent increase on goods import in nominal terms year on year in 2018.
Armenia's foreign trade turnover increased by 11.6 percent in January–May 2021, compared to an 11.2 percent decline a year earlier, owing to a reversal of the y-o-y dynamics of exports and imports from 8.1 to 12.8 percent decline to 20.8-6.7 percent growth, according to preliminary data from the RA Statistical Committee. As a consequence, Armenia's foreign trade turnover reached 1.5 trillion drams ($2.9 billion), with exports totaling 567.4 billion drams ($1.1 billion) and imports being 931.8 billion drams ($1.8 billion), resulting in a 364.4 billion drams ($695 million) international trade deficit. Foreign trade turnover climbed by 3.9 percent in May 2021,resulting to a 7.9% increase in exports and a minimal 1.5 percent increase in imports. As a consequence, Armenia's international trade deficit in May 2021 was 83.4 billion drams ($160 million), decreasing 7.4% from the same month in 2020. (by 21.1 percent ). Foreign trade turnover increased by 13% year over year in May 2020, due to a 30.7 percent increase in exports and a moderate 4.3 percent increase in imports.
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Economy of Armenia
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Partners
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Partners
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Economy of Armenia
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European Union
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European Union
In 2022 Armenia's bilateral trade with the EU topped $2.3 billion, making the EU one of Armenia's biggest and most important economic partners.
EU-Armenia trade increased by 15% in 2018 reaching a total value of €1.1 billion.
In 2017 EU countries accounted for 24.3 percent of Armenia's foreign trade. Whereby exports to EU countries grew by 32,2% to $633 million.
In 2010 EU countries accounted for 32.1 percent of Armenia's foreign trade. Germany is Armenia's largest trading partner among EU member states, accounting for 7.2 percent of trade; this is due largely to mining exports. Armenian exports to EU countries have skyrocketed by 65.9 percent, making up more than half of all 2010 January to September exports. Imports from EU countries increased by 17.1 percent, constituting 22.5 percent of all imports.
During January–February 2007, Armenia's trade with the European Union totaled $200 million."Armenia Keeps Up Robust Growth" , Armenia Liberty (RFE/RL), March 30, 2007. During the first 11 months of 2006, the European Union remained Armenia's largest trading partner, accounting for 34.4 percent of its $2.85 billion commercial exchange during the 11-month period."Armenia Posts Record-High Trade Deficit" , Armenia Liberty (RFE/RL), January 8, 2007.
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Economy of Armenia
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Russia and former Soviet republics
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Russia and former Soviet republics
On 14 October 2024, Armenia notified its ratification of the Commonwealth of Independent States Agreement on Free Trade in Services, Establishment, Operations and Investment, which entered into force on 13 November 2024 for Armenia.https://cis.minsk.by/reestrv2/print/documentCard?ids=6738
In the first quarter of 2019, share of Russia in foreign trade turnover fell to 11% from 29% from the previous year.
In 2017, CIS countries accounted for 30 percent of Armenia's foreign trade. Exports to CIS countries rose by 40,3% to $579,5 million.
Bilateral trade with Russia stood at more than $700 million for the first nine months of 2010 – on track to rebound to $1 billion mark first reached in 2008 prior to the global economic crisis.
During January–February 2007, Armenia's trade with Russia and other former Soviet republics was $205.6 million (double the amount from the same period the previous year), making them the country's number one trading partner. During the first 11 months of 2006, the volume of Armenia's trade with Russia was $376.8 million or 13.2 percent of the total commercial exchange.
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Economy of Armenia
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China
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China
In 2017 trade with China grew by 33.3 percent.
As of early 2011 trade with China is dominated by imports of Chinese goods and accounts for about 10 percent of Armenia's foreign trade.Chinese FM Visits Armenia, Urges Closer Ties , Armenia Liberty (RFE/RL), February 17, 2011. The volume of Chinese-Armenian trade soared by 55 percent to $390 million in January–November 2010. Armenian exports to China, though still modest in absolute terms, nearly doubled in that period.
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Economy of Armenia
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Iran
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Iran
Armenia's trade with Iran grew significantly from 2015 and 2020. Because Armenia's land borders to the east and west have been closed by the governments of Turkey and Azerbaijan, domestic firms have looked to Iran as a key economic partner. In 2020, trade between the countries exceeded $300 million. The number of Iranian tourists has risen in recent years, with an estimated 80,000 Iranian tourists in 2010. In January 2021, Iran's finance minister Farhad Dejpasand said that trade between the two countries could reach $1 billion annually as Iran looks to become a regional economic force.
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Economy of Armenia
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United States
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United States
From January to September 2010, bilateral trade with the United States was about $150 million, on track for about a 30 percent increase over 2009. An increase in Armenia's exports to the US in 2009 and 2010 has been due to shipments of aluminum foil.
During the first 11 months of 2006 US–Armenian trade totaled $152.6 million.
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Economy of Armenia
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Georgia
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Georgia
The volume of Georgian–Armenian trade remains modest in both relative and absolute terms. According to official Armenian statistics it rose by 11 percent to $91.6 million in January–November 2010. The figure was equivalent to just over 2 percent of Armenia's overall foreign trade.Armenia, Georgia Agree On Joint Border Control , Armenia Liberty (RFE/RL), February 16, 2011.
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Economy of Armenia
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Turkey
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Turkey
In 2019 the volume of bilateral trade with Turkey was about $255 million, with trade taking place across Georgian territory. This figure is not expected to increase significantly so long as the land border between the Armenia and Turkey remains closed.
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Economy of Armenia
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Foreign direct investments
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Foreign direct investments
Foreign direct investment (FDI) into Armenia decreased by US$2.7 million in December 2020, compared to a reduction of US$10.3 million the previous quarter.
Armenia foreign direct investment: USD mn Net Flows data is available from March 1993 through December 2020, and is updated quarterly.
The statistics ranged from a high of US$425.9 million in December 2008 to a low of –67.6 USD mn in December 2014.
Armenia's current account surplus is US$51.7 million in December 2020, according to the most recent statistics.
-In June 2021, Armenian Direct Investment Abroad increased by 12.8 million dollars.
-In June 2021, it boosted its Foreign Portfolio Investment by $14.6 million.
-In December 2020 the country's nominal GDP was reported to be 3.8 billion dollars.
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Economy of Armenia
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Yearly FDI figures
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Yearly FDI figures
Despite robust economic growth foreign direct investment (FDI) in Armenia remain low as of 2018.
in January–September 2019 the net flow of direct foreign investment in the real sector of the Armenian economy stood at about $267 million.
+FDI inward flows as percentage of gross fixed capital formationYearArmeniaGeorgiaSouth-East Europe and the CISWorld2005–2007 p.a. average20.0%201617.6%35.9%15.8%10.2%201711.4%42.3%9.6%7.5%20189.5%25.3%6.4%6.0%
Jersey was the main source of FDI in 2017. Moreover, combined net FDI from all other sources was negative, indicating capital outflow. The tax haven Jersey is home to an Anglo-American company, Lydian International, which is currently building a controversial massive gold mine in the southeastern Vayots Dzor Province. Lydian has pledged to invest a total of $370 million in the Amulsar gold mine.
Country
(with FDI net flow
exceeding 1 billion AMD)Net flow of FDIin 2017,
in billion AMDNet flow of FDI
in 9 months of 2018,
in billion AMDJersey10820.6Germany1414.3Netherlands30.4Argentina31.72UK21.31Hungary20Ireland0.60.6Cyprus −11.76France −6 −2Lebanon −73.4Russia −1211.7Luxembourg −22 −1Italy −0.68 −0.5USA0.51.78
Negative values indicate investments of Armenian corporations to foreign country exceeding investments from that country in Armenia.
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Economy of Armenia
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Stock FDI
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Stock FDI
FDI stock to GDP ratio grew continuously during 2014–2016 and reached 44.1% in 2016, surpassing average figures for Commonwealth of Independent States countries, transition economies and the world.
+Stock inward FDIYearMillion dollarsShare of GDP20154 33820164 63543.9%20174 75241.2%20185 51144.4%
By the end of 2017 stock net FDI (for the period 1988–2017) reached 1824 billion AMD, while gross flow of FDI for the same period reached 3869 billion AMD.
Countries
with largest positionsStock net FDI by end of 2017,
in billion AMDRussia773Jersey159Argentina112France83Lebanon77Cyprus77USA73Germany73UK53Netherlands50U.A.E.29Luxembourg24Italy14Switzerland10
As of February 2019, the European Investment Bank (EIB) has invested about 380 million euros in the various projects implemented in Armenia.
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Economy of Armenia
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FDI in founding capital of financial institutions
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FDI in founding capital of financial institutions
During the sector consolidation process in 2014–2017 the share of foreign capital in the authorized capital of the Armenian commercial banks decreased from 74,6% to 61,8%.
Net FDI in founding capital of financial institutions accumulated by end of September 2017 is presented in pie chart below.
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Economy of Armenia
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Foreign aid
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Foreign aid
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Economy of Armenia
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United States
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United States
The Armenian government receives foreign aid from the government of the United States through the United States Agency for International Development and the Millennium Challenge Corporation.
On March 27, 2006, the Millennium Challenge Corporation signed a five-year, $235.65 million compact with the Government of Armenia. The single stated goal of the "Armenian Compact" is "the reduction of rural poverty through a sustainable increase in the economic performance of the agricultural sector." The compact includes a $67 million to rehabilitate up to 943 kilometers of rural roads, more than a third of Armenia's proposed "Lifeline road network". The Compact also includes a $146 million project to increase the productivity of approximately 250,000 farm households through improved water supply, higher yields, higher-value crops, and a more competitive agricultural sector."Armenia and Millennium Challenge Corporation: Building a Dynamic Partnership for Poverty Reduction through Economic Growth" , Millennium Challenge Corporation, March 27, 2006.
In 2010 the volume of US assistance to Armenia remained near 2009 levels; however, longer-term decline continued. The original Millennium Challenge Account commitment for $235 million had been reduced to about $175 million due to Armenia's poor governance record. Thus, the MCC would not complete road construction. Instead, the irrigated agriculture project was headed for completion with apparently no prospects for extension beyond 2011.
On May 8, 2019, conditioned with the political events in Armenia since April 2018, United States Agency for International Development signed an extension of US–Armenia bilateral agreement in the area of governance and public administration, which would add additional US$8.5 million to the agreement. By signing another document on the same day, USAID increased the aid by additional US$7.5 million in support for more competitive and diversified private sector in Armenia. The financial allocations will be directed to the financing of the USAID-funded project in infrastructures, agriculture, tourism․ After the signing of the new bilateral agreements, the total amount of the U.S. grants to Armenia amounted to around US$81 million.
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Economy of Armenia
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European Union
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European Union
According to the agreement signed in 2020 EU will provide Armenia with 65 million euros for implementation of three programs in such areas as energy efficiency, environment and community development and formation of tools for implementation of the Comprehensive and Enhanced Partnership Agreement.
With curtailment of the MCC funding, the European Union may replace the US as Armenia's chief source of foreign aid for the first time since independence. From 2011 to 2013 the EU is expected to advance at least €157.3 million ($208 million) in aid to Armenia.
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Economy of Armenia
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Domestic business environment
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Domestic business environment
thumb|Headquarters of the Armenian State Revenue Committee (housing both the Armenian Customs Service and the Armenian Tax Service).Since transition of power to new leadership in 2018 Armenian government works on improving domestic business environment. Numerous formerly privileged business are now required to pay taxes and officially register all workers. Mainly due to this there were 9.7% more payroll employees registered in January 2019 as compared to January 2018.
In April 2019 Armenian parliament approved reforms of management of joint stock companies effectively enacting a blocking minority shareholders stake of 25% to cope with shareholder oppression.
Following the advice of economic advisers who cautioned Armenia's leadership against the consolidation of economic power in the hands of a few, in January 2001 the government of Armenia established the State Commission for the Protection of Economic Competition. Its members cannot be dismissed by the government.Competitive Edge: The pitfalls of monopolies, and the challenges of a business-influenced parliament , ArmeniaNow.com, January 4, 2008.
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Economy of Armenia
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Foreign trade facilitation
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Foreign trade facilitation
In June 2011 Armenia adopted a Law on Free Economic Zones (FEZ), and developed several key regulations at the end of 2011 to attract foreign investments into FEZs: exemptions from VAT (value added tax), profit tax, customs duties, and property tax.
The “Alliance” FEZ was opened in August 2013, and currently has nine businesses taking advantage of its facilities. The focus of “Alliance” FEZ is on high-tech industries which include information and communication technologies, electronics, pharmaceuticals and biotechnology, architecture and engineering, industrial design and alternative energy. In 2014, the government expanded operations in the Alliance FEZ to include industrial production as long as there is no similar production already occurring in Armenia.
In 2015 another “Meridian” FEZ, focused on jewelry production, watch-making, and diamond-cutting opened in Yerevan, with six businesses operating in it. The investment programs for these companies must still be approved by government.
The Armenian government approved the program to construct the Meghri free economic zone at the border with Iran, which is expected to open in 2017.
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Economy of Armenia
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Controversial issues
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Controversial issues
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Economy of Armenia
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Monopolies
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Monopolies
Major monopolies in Armenia include:
Natural gas import and distribution, held by Gazprom Armenia, formerly named ArmRosGazprom (controlled by Russian monopoly Gazprom)New Russian Gas Price For Armenia Unveiled , Armenia Liberty (RFE/RL), September 23, 2008.
Armenia's railway, South Caucasus Railway, owned by Russian Railways (RZD)Armenian Railway Under Anti-Trust Investigation , Armenia Liberty (RFE/RL), November 5, 2008.
Electricity transmission and distribution (see Electricity sector in Armenia)
Newspaper distribution, held by HaymamulEditors Concerned About Sale Of Newspaper Distribution Firm, Armenia Liberty (RFE/RL), September 13, 2007.
Former notable monopolies in Armenia :
Wireless (mobile) telephony, held by Armentel until 2004French Mobile Giant Set To Win Armenia Tender, Armenia Liberty (RFE/RL), October 6, 2008.
Internet access, held by Armentel until September 2006Armenian Telecom Operator Fined $1 Mln , Armenia Liberty (RFE/RL), July 30, 2008.
Fixed-line telephony, held by Armentel until August 2007Armenian Telecom Sector Further Liberalized, Armenia Liberty (RFE/RL), August 24, 2007.
Assumed (unofficial) monopolies until 2018 velvet revolution:
Oil import and distribution (claimed by Armenian opposition parties to belonging to a handful of government-linked individuals,Armenian Premier Downplays Impact Of Georgia War , Armenia Liberty (RFE/RL), August 28, 2008. one of which – "Mika Limited" – is owned by Mikhail Baghdasarian,Armenian Cement Plant ‘Sold To Russian Firm’ , Armenia Liberty (RFE/RL), August 15, 2008. while the other – "Flash" – is owned by Barsegh Beglarian, a "prominent representative of the Karabakh clan"Press Review (quoting Zhamanak Yerevan), Armenia Liberty, March 19, 2007.)
Aviation kerosene (supplying to Zvartnots airport), held by Mika LimitedArmenia Airport Hamstrung By Mysterious Fuel Shortage, Armenia Liberty (RFE/RL), November 7, 2005.
Various basic foodstuffs such as rice, sugar, wheat, cooking oil and butterArmenian Central Bank Approves Another Rate Rise, Armenia Liberty (RFE/RL), June 3, 2008.Government Vows To Curb Rising Inflation , Armenia Liberty (RFE/RL), May 29, 2008. (the Salex Group enjoys a de facto monopoly on imports of wheat, sugar, flour, butter and cooking oil. Its owner was a parliament deputy Samvel Aleksanian (a.k.a. "Lfik Samo") and close to the country's leadership.Mining Giant Remains Armenia’s Top Taxpayer , Armenia Liberty (RFE/RL), January 29, 2008.Armenia Hit By Sugar Shortage , Armenia Liberty (RFE/RL), October 23, 2007.).
According to one analyst, Armenia's economic system in 2008 was anticompetitive due to the structure of the economy being a type of "monopoly or oligopoly". "The result is the prices with us do not drop even if they do on international market, or they do quite belated and not to the size of the international market."Price Predictions: With present inflation at nearly triple expectation, economists challenge 2009 forecast, ArmeniaNow.com, November 14, 2008.
According to the 2008 estimate of a former prime minister, Hrant Bagratyan, 55 percent of Armenia's GDP is controlled by 44 families.
In early 2008 the State Commission for the Protection of Economic Competition named 60 companies having "dominant positions" in Armenia.
In October 2009, when visiting Yerevan, the World Bank’s managing director, Ngozi Okonjo-Iweala, warned that Armenia will not reach a higher level of development unless its leadership changes the "oligopolistic" structure of the national economy, bolsters the rule of law and shows "zero tolerance" towards corruption.Armenia Warned To End ‘Oligopoly’ , Armenia Liberty (RFE/RL)October 10, 2009. "I think you can only go so far with this economic model," Ngozi Okonjo-Iweala told a news conference in Yerevan. "Armenia is a lower middle-income country. If it wants to become a high-income or upper middle-income country, it can not do so with this kind of economic structure. That is clear." She also called for a sweeping reform of tax and customs administration, the creation of a "strong and independent judicial system" as well as a tough fight against government corruption. The warning was echoed by the International Monetary Fund."Armenia Learning From Crisis, Says World Bank " , Armenia Liberty (RFE/RL), November 27, 2009.
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Economy of Armenia
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Takeover of Armenian industrial property by the Russian state and Russian companies
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Takeover of Armenian industrial property by the Russian state and Russian companies
Since 2000 the Russian state has acquired several key assets in the energy sector and Soviet-era industrial plants. Property-for-debt or equity-for-debt swaps (acquiring ownership by simply writing off the Armenian government's debts to Russia) are usually the method of acquiring assets. The failure of market reforms, clan-based economics, and official corruption in Armenia have allowed the success of this process.Socor, Vladimir. "Armenia's Energy Sector, Other Industrial Assets Passing Under Russia's Control" , IASPS Policy Briefings: Oil in Geostrategic Perspective, November 13, 2002.
In August 2002 the Armenian government sold an 80 percent stake in the Armenian Electricity Network (AEN) to Midland Resources, a British offshore-registered firm which is said to have close Russian connections.
In September 2002 the Armenian government handed over Armenia's largest cement factory to the Russian ITERA gas exporter in payment for its $10 million debt for past gas deliveries.>Danielyan, Emil. RUSSIA TIGHTENS GRIP ON ARMENIA WITH DEBT AGREEMENTS, Eurasianet, May 7, 2003
On November 5, 2002, Armenia transferred control of 5 state enterprises to Russia in an assets-for-debts transaction which settled $100 million of Armenian state debts to Russia. The document was signed for Russia by Prime Minister Mikhail Kasyanov and Industry Minister Ilya Klebanov, while Prime Minister Andranik Markarian and National Security Council Secretary Serge Sarkisian signed for Armenia. The five enterprises which passed to 100 percent Russian state ownership are:
Armenia's largest thermal gas-burning power plant, which is in the town of Hrazdan
"Mars" — electronics and robotics plant in Yerevan, a Soviet-era flagship for both civilian and military production
three research-and-production enterprises — for mathematical machines, for the study of materials, and for automated control equipment — these being Soviet-era military-industrial plants
In January 2003 the Armenian government and United Company RUSAL signed an investment cooperation agreement, under which United Company RUSAL (which already owned a 76% stake) acquired the Armenian government's remaining 26% share of RUSAL ARMENAL aluminum foil mill, giving RUSAL 100% ownership of RUSAL ARMENAL.
On November 1, 2006, the Armenian government handed de facto control of the Iran-Armenia gas pipeline to Russian company Gazprom and increased Gazprom's stake in the Russian-Armenian company ArmRosGazprom from 45% to 58% by approving an additional issue of shares worth $119 million.Socor, Vladimir. "Russia Cements Control of Armenia's Energy System", Eurasia Daily Monitor, November 3, 2006. This left the Armenian government with a 32% stake in ArmRosGazprom. The transaction will also help finance ArmRosGazprom's acquisition of the Hrazdan electricity generating plant’s fifth power bloc (Hrazdan-5), the leading unit in the country.
In October 2008 the Russian bank Gazprombank, the banking arm of Gazprom, acquired 100 percent of Armenian bank Areximbank after previously buying 80 percent of said bank in November 2007 and 94.15 percent in July of the same year.
In December 2017 government transferred natural gas distribution networks in cities Meghri and Agarak to Gazprom Armenia for cost-free use. Construction of these was funded by foreign aid and costed about 1.3 billion AMD.
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Economy of Armenia
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Non-transparent deals
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Non-transparent deals
Critics of the Robert Kocharyan government (in office until 2008) say that the Armenian administration never considered alternative ways of settling the Russian debts. According to economist Eduard Aghajanov, Armenia could have repaid them with low-interest loans from other, presumably Western sources, or with some of its hard currency reserves which then totaled about $450 million. Furthermore, Aghajanov points to the Armenian government's failure to eliminate widespread corruption and mismanagement in the energy sector – abuses that cost Armenia at least $50 million in losses each year, according to one estimate.
Political observers say that Armenia's economic cooperation with Russia has been one of the least transparent areas of the Armenian government's work. The debt arrangements have been personally negotiated by (then) Defense Minister (and later President) Serge Sarkisian, initially Kocharyan's closest political associate. Other top government officials, including former Prime Minister Andranik Markarian, had little say on the issue. Furthermore, all of the controversial agreements have been announced after Sarkisian's frequent trips to Moscow, without prior public discussion.
While Armenia is not the only ex-Soviet state that has incurred multi-million-dollar debts to Russia over the past decades, it is the only state to have so far given up such a large share of its economic infrastructure to Russia. For example, pro-Western Ukraine and Georgia (both of which owe Russia more than Armenia) have managed to reschedule repayment of their debts.
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Economy of Armenia
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Transportation routes and energy lines
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Transportation routes and energy lines
thumb|Zvartnots International Airport main concourse
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Economy of Armenia
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Internal
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Internal
Since early 2008, Armenia's entire rail network is managed by the Russian state railway under brand South Caucasus Railways."Armenia ‘Pressing Ahead’ With Iran Rail Link" , Armenia Liberty (RFE/RL), October 14, 2008."Armenia Scrambles To Restore Vital Supplies Via Georgia" , Armenia Liberty (RFE/RL), August 18, 2008.
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Economy of Armenia
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Metros
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Metros
Yerevan Metro was launched in 1981. It serves 11 active stations.
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Economy of Armenia
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Buses
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Buses
Yerevan Central Bus Station, also known as Kilikia Bus Station, is Yerevan's primary bus terminal, linking buses to both domestic and foreign destinations.
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Economy of Armenia
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Roadways
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Roadways
Total length:
8,140 km, World ranking: 112 (7,700 km paved including 1561 km of expressways).
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Economy of Armenia
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Through Georgia
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Through Georgia
Russian natural gas reaches Armenia via a pipeline through Georgia.
The only operational rail link into Armenia is from Georgia. During Soviet times, Armenia's rail network connected to Russia's via Georgia through Abkhazia along the Black Sea. However, the rail link between Abkhazia and other Georgian regions has been closed for a number of years, forcing Armenia to receive rail cars laden with cargo only through the relatively expensive rail-ferry services operating between Georgian and other Black Sea ports.
The Georgian Black Sea ports of Batumi and Poti process more than 90 percent of freight shipped to and from landlocked Armenia. The Georgian railway, which runs through the town of Gori in central Georgia, is the main transport link between Armenia and the aforementioned Georgian seaports. Fuel, wheat and other basic commodities are transported to Armenia by rail.
Armenia's main rail and road border-crossing with Georgia (at ) is at the Debed river near the Armenian town of Bagratashen and the Georgian town of Sadakhlo.
The Upper Lars border crossing (at Darial Gorge) between Georgia and Russia across the Caucasus Mountains serves as Armenia's sole overland route to the former Soviet Union and Europe."Russia, Georgia Agree To Reopen Border Gate" , Armenia Liberty (RFE/RL), December 24, 2009. It was controversially shut down by the Russian authorities in June 2006, at the height of a Russian-Georgian spy scandal. Upper Lars is the only land border crossing that does not go through Georgia's Russian-backed breakaway regions of South Ossetia and Abkhazia. The other two roads linking Georgia and Russia run through South Ossetia and Abkhazia, effectively barring them to international traffic.
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