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FAX: [374] (2) 151-550, 151-511

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@Armenia:Economy

Economy-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 area. The
agricultural sector has long-term needs for more investment and
updated technology. The privatization of industry has been at a slower
pace, but ahead of most of the rest of the CIS. Armenia is a food
importer and its mineral deposits (gold, bauxite) are small. The
ongoing conflict with Azerbaijan over the ethnic Armenian-dominated
region of Nagorno-Karabakh and the embargoes imposed by Azerbaijan and
Turkey contributed to a severe economic decline in the early 1990s. By
1994, however, the Armenian Government had launched an ambitious
IMF-sponsored economic program that has resulted in positive growth
rates in 1995-97. Armenia also managed to slash inflation and to
privatize most small and medium-sized enterprises. The chronic energy
shortages Armenia suffered in recent years has been partially offset
by the energy supplied by one of its nuclear power plants at Metsamor,
which in 1996 supplied about 40% of the country's energy needs,
according to the Armenian Government. Moreover, Armenia is expanding
its energy imports from Iran.

GDP: purchasing power parity-$9.5 billion (1997 est.)

GDP-real growth rate: 2.7% (1997 est.)

GDP-per capita: purchasing power parity-$2,750 (1997 est.)

GDP-composition by sector:
agriculture: 38%
industry: 32%
services: 30% (1996 est.)

Inflation rate-consumer price index: 13.2% (1997 est.)

Labor force:
total: 1.6 million (1997)
by occupation: manufacturing, mining, and construction 25%,
agriculture 38%, services 37%

Unemployment rate: 10.6% officially registered unemployed, but large
numbers of underemployed (June 1997)

Budget:
revenues: $322 million
expenditures: $424 million, including capital expenditures of $80
million (1998 est.)

Industries: much of industry is shut down; metal-cutting machine
tools, forging-pressing machines, electric motors, tires, knitted
wear, hosiery, shoes, silk fabric, washing machines, chemi