Top 3 industries driving the Armenian economy
2020 has been tough for Armenia and for the rest of the world. The pandemic had a severe negative impact on the global economy. Despite the economic lockdown and restrictions, the Armenian economy proved it is more resilient than the economies of many other countries.
There are 2 reasons that helped Armenia withstand the pandemic outbreak to some extent:
- Armenian economy extends beyond a single main sector structure as several economic sectors drive the economy of the country,
- The GDP of the country is made up of sectors that have high demand irrespective of the market (and global) situation.
Let’s explore the proportions of economic sectors in gross domestic product (GDP). The top sectors contributing to the GDP of the country are agriculture, industry, and service. All these sectors in their turn are made up of many diverse components.
Agriculture
Agriculture in Armenia contributes around 11.99 % of the country’s GDP. This sector employs around 24% of the total workforce.
The main crops that the country produces and exports are potatoes, grapes, wheat, tomatoes, apricots, melons, and walnuts. Crops represent 60% of the sector GDP. The remaining 40% is contributed by the livestock subsector.
The share of the agricultural sector is quite big if we compare it with the stats of the neighboring countries.
Considering the government stimulus package in regard to this sector, an even higher percentage is expected for this year. Introduction of innovative solutions, expansion of the cultivated lands, and optimization of the irrigation systems are the top strategic directions of the Ministry of Economy of the RA (further details on the agricultural outlook of Armenia available here).
Industry
This sector represents 24.3% of the country’s GDP. It employs 17.5% of the total labor force.
Armenia is a major producer of molybdenum, copper, bauxite, gold, lead, zinc, and iron. Export of minerals ensures about 25% of the export revenue of the country.
Along with mining, producing hydropower also makes a considerable contribution to the industry’s GDP.
Services
This sector makes up the biggest share of the country’s economy. Fact is, 54.2% of the country’s GDP is contributed to the service sector.
Moreover, it owns 35% of the total employment. The leading subsections are the financial sector, jewelry, and tourism.
Commercial banks comprise the financial sector of Armenia. As of 2019 data, more than 12000 employees work in the commercial banking sector (17 banks in Armenia). There are many credit companies as well. Our experience in the investment sector has proved the stability of the banking sector of Armenia is one of the most important aspects that makes Armenia an attractive destination for investors.
The jewelry sector adds up to 13% of the total export of the country. The sector’s potential is quite big, and some state-supported programs are on the agenda of the government.
Before the pandemic hit, the tourism sector recorded a balanced growth every year. Currently, the government of Armenia has some incentives for bringing the sector back to pre-pandemic levels.
Interested in further exploring the economic situation in Armenia? At Kingsmen Properties, we are ready to address all your questions and guide you through your investment journey in Armenia. Check out our investment opportunities here or give us a call at (+374) 95 110 301. High return on investment guaranteed!