The Economic Outline of the Republic of Armenia
Over the past few years, the economic activity of Armenia has been growing faster than ever before. The pandemic outbreak and the political tensions on the border marked their stamps on the growth rates of the economy but the post-Covid comeback already shows quite positive trends.
Many factors are contributing to the fast growth of the Armenian economy.
First, Armenia implements a business-friendly monetary policy. Next, the country uses its mining resources (molybdenum, zinc, copper, gold) and in the last few years, the global market has fueled a sharp increase in copper prices. Finally, the country has received financial support from international organizations. The country’s membership in the Eurasian Economic Union and the partnership with the EU have also contributed to the development of the economy.
The economy of Armenia is based on multiple sectors such as agriculture, mining, jewelry, telecommunications, hydroelectricity, textile, and tourism. Other important economic industries in Armenia are software development and pharmaceuticals.
Exports
Armenia’s main exports are minerals, food, textile, precious metals, and non-precious metals. The main export partners are Bulgaria, Germany, Netherlands, Switzerland, USA, Russia, Georgia, China, and Iran. Since 2019, the country has also started partnering with Turkmenistan, Estonia, and Canada.
Over the past few years, the export volumes have increased on a yearly basis. Not only has the law of “no customs duty” within the Eurasian Economic Commission Union affected this trend but also the government of Armenia has initiated many state-support programs directed towards the development of agriculture and the growth rates of export volumes.
Imports
Armenia imports petroleum gas, refined petroleum, natural gas, oil, cereals, rubber, cork and wood, and electrical machinery. The country’s main import partners are Russia, China, Ukraine, Iran, Germany, Italy, Turkey, France, and Japan.
Literacy
Armenia is assigned a 99% literacy rate by the UNESCO Institute for Statistics.
Employment
Covid-19 cases caused unemployment in the labor market of Armenia. Luckily, the country is recovering from this situation at a fast pace. E.g. the number of employed persons in Armenia increased to 904.000 in June of 2021 from 779.000 in May of 2021.
Wages
According to the Statistical Committee, monthly wages averaged 172,000 AMD ($349 USD) in February 2019.
It is estimated that wages rise at 0.8% for each additional year of experience and “the ability to solve problems and learn new skills yields a wage premium of nearly 20%”.
Foreign Investments
Despite the global crisis triggered by the Coronavirus, FDI inflows to Armenia reached USD 117 million in 2020.
Russia, Greece, Cyprus, Germany, and the Armenian Diaspora are the main investment partners of the country. The government of Armenia has introduced favorable conditions and laws for foreign investments and there are also many state-support programs aimed at encouraging foreign investors. That’s why the World Bank has announced that Armenia ranks first among CIS countries in terms of FDI appeal.
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