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Armenia

Economic situation in Armenia

Though you'll be able to see during your own trip to Armenia that the country has implemented a process of economic modernisation, you will also observe that serious levels of inequality still exist amongst its population.

Economic situation

When you visit Armenia, you'll quickly come to realise that even though the country has not escaped the effects of the global economic crisis, it has managed to introduce the reforms required to ease the impact of the situation. Nevertheless, income inequality remains a serious problem in Armenia.

To provide a clearer picture of the situation, the country's GDP stands at a little over 12 billion dollars. GDP per capita is $6,400 (£4186 at time of writing); annual growth is around 5%; unemployment stands at 7%, and the rate of inflation is a little over 10%. Ten percent of all Armenians exist below the poverty line, with the country's economy controlled by just slightly more than 20 different families, The total value of Armenia's exports represents just a third that of its imports.

In Armenia

The different economic sectors

To get an idea of the relevative importance of the different economic sectors in Armenia, the first thing to realise is that agriculture employs a little over 38% of the country's population, the industrial sector a little over 15%, and the service sector a little over 46%. If you compare these sectors on the basis of GDP share, however, you'll discover that the agricultural sector only accounts for a little over 17% of the total, the industrial sector a little over 36%, and the service sector a little over 46%.

The agricultural sector in Armenia is largely made up of very small farms

The industrial sector has undergone a wave of large-scale privatisation primarily affecting the textile, electricity and telecommunications industries.

It is evident, of course, that the service sector forms the foundation of the country's economy. It's also important to remember that Armenia's economy is very reliant on international aid, principally that provided by the United States, but also the money that Armenians living abroad send back to the country.

David Debrincat
459 contributions
Updated 3 November 2015

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