National economy of Armenia - industries, GDP and prosperity level

If we take into account all the countries of the former CIS region, the economic development of Armenia today has a fairly large dynamics. Experts characterize this Republic as an industrial-agrarian one. After all, over the past few decades, the state has been trying to pay equal attention to industrial development and the development of agriculture. The country’s Gross Domestic Profit (GDP) for the State as of 2016 was about 5,045,978 drams. It is worth noting that the figures are growing regularly, and if we compare the data at the beginning of the year 2000, the country’s GDP has more than quadrupled. Despite the fact that the entire world economy was exposed to an incredible crisis in 2007, Armenia was able to stay afloat and continue to improve its performance. In many ways, this is due to the fact that the volume of industrial production in the country is constantly growing. Also, the electric power industry, agrarian sector, and the service industry, and other sectors are gradually increasing their turnover.

After the collapse of the Soviet Union, Armenia remained in the worst conditions in comparison with other countries. The country was previously the main economic link in the light and food industries, the actively developed chemical industry, metalworking and some types of machine building. In the first days of independence however, the Republic was only a small state of Transcaucasia without oil and gas and with little or no access to big water bodies. In addition, the country could not boast of any significant mineral reserve. Also, because of the terrible conflict in Nagorno-Karabakh, the country was completely cut off from Azerbaijan and Turkey and this led to some economic blockade. In the aftermath came a new blow; the refusal of cargo handling with Russia because of the Georgian-Abkha conflict. The government of the country was forced to apply for a loan from the International Monetary Fund and the World Bank in order to get out of this deplorable situation. Already in the first years after receiving the loan, the rate of decrease in inflation dropped to a minimum level and the data on the country’s GDP were inexorably rising.

More than twenty percent of the total GDP is industrial revenue. Its main branches are mechanical engineering (metal-cutting constructions, press-molding equipment, precision instruments, etc.) and metal processing. The petrochemical and chemical industries play a small role. It is on the basis of the deposit of various minerals that the production of building materials is built. In some regions of the country, for example in Agarak and Kapan, there are significant deposits of copper ore. Several factories were launched on this basis for the remelting of this raw material. The largest chemical complex of Armenia is engaged in the processing of diamonds which also brings considerable profit. In the food industry, a branch of wine-cognac production received special development. Copyright www.orangesmile.com

About 45 percent of the country’s total area is involved in agriculture. At the same time, the most part is occupied by pastures while grains and other crops are grown in the rest of the territory. The development of agriculture for several decades has been hampered by soil erosion which the state is continuously fighting against. However, the process so far has not been very successful. Livestock is concentrated on dairy and meat products. The main activity in the high mountain regions is sheep farming. It should be noted that a significant part of all agricultural products are consumed within the agricultural land itself. This is quite well reflected in the country’s economy. Most of the exports are not meat and dairy products but fruits and vegetables (about 79% of the total grown product). The main exports are diamonds, cars and specialized equipment as well as copper work. Armenia has the closest trade relations with Iran, Russia, Georgia, Belgium and the United States. Armenia buys virtually all energy resources including oil and gas from abroad, most often from Russia. The country also actively imports diamonds.

According to statistics, the worst hit industry in Armenia is the construction industry. The active decrease began from the beginning of last year. There is also a significant decrease in cargo turnover, and the downward trend continues to this day. As of the beginning of this year, one dollar gives about 495 drams in Armenia. The average salary of the local population is about 190 thousand drams, and this is about four hundred dollars. The minimum pension in the country is 40 thousand drams. That said it is worthwhile to know that the domestic economic situation in the country allows locals to live on about five dollars a day. The unemployment rate in the country is quite high amounting to about 245,000 people as of last year (more than 18 percent of the total population) and since the beginning of the year 2000, there has been a regular tendency for this number to increase.

It is worth noting that the government of the country constantly takes various serious measures aimed at eliminating the consequences of economic crisis situation, maintaining a decent standard of living for its citizens and settling internal and external economic issues. There is quite an effective social support and benefits program for the unprotected and vulnerable members of the population. As of today, the country pays much attention to supporting domestic producers of agricultural products. Also, the government seeks to improve working conditions for small and medium-sized businesses and constantly supports all undertakings and expansion of the industrial sector. Quite possibly, despite the world economic recession, the chosen policy of Armenia will in the coming years aid her development and help raise the level of GDP indicators systematically every year.