Armenia Economic Forecast

By: EconomyWatch Content Team   Date: 13 June 2010

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Until 1991, Armenia was a part of the Soviet Union but once split, economic reform began to include change in financial policies, privatization, and pricing reform. By 1994, Armenia’s government started an aggressive economic liberalization program sponsored by the International Monetary Fund or IMF, which had a positive impact on economic growth and rates. However, the country was hit by the world financial crisis in 2007, dropping the Gross Domestic Product rate from more than 10% to 6.8%. Although challenged, Armenia reduced the level of poverty, lowered inflation, privatized the majority of both small and medium enterprises, and stabilized the country’s economy. Using smaller sectors of agriculture, fisheries, and farming, and reopening/opening nuclear power plants, the economy continued to stabilize. Other areas that have helped Armenia’s economy include mineral deposits, the building of a natural gas pipeline, and improved customs and taxation.

Armenia GDP Forecast

During the 2000s, Armenia enjoyed significant growth levels for the GDP, thanks to a number of external factors such as cash remittances, increase of tourism, and foreign aid. In fact, Russia played a key role in the growth of Armenia’s economy. Then in 2008, the Armenia GDP (Gross Domestic Product, Current Prices, US Dollar) was reported at $11.92 billion in US dollars. Over the next 24 months, the country experienced a reduction of 26.88%, closing out 2009 at $8.714 billion. At that time, Armenia was placed at number 125 for world rankings. To predict future years, forecasters use values that are based on the GDP in national currency, as well as protections for exchange rate that are provided by economists of the country. With this, 2010 is being forecasted at $8.27 billion in US dollars, which would be a 5.11% reduction from 2009’s numbers. Then by the year-end 2015, it is expected the GDP will be at $10.336 billion.

Armenia Unemployment Forecast

Armenia population was estimated at 3.267 million at the end of 2009, which for world rankings placed the country at position number 129. This means based on the world’s average for unemployment, Armenia is 3.27 more than the average. As far as the number of people currently working, the best estimate is around 1.481 million and of these, most work in the industry, services, and agriculture sectors although imports and exports also provide jobs. With this, the current Armenia unemployment rate is around 7.1%. The good news is that unemployment in this country has improved since the early 1990s but more work is needed. The government understands to rectify the problem it will be necessary to create economic reform, which would make Armenia a more competitive country. This along with building on improvements already in place and better relations with Turkey and Azerbaijan, it is believed unemployment will decline.

Armenia Inflation Rate Forecast

Then for the Armenia inflation rate, 2008 was at 8.97%. From that year to the end of 2009, the country saw a decline of 61.72%, which meant at the close of 2009, the country's inflation was reported at 3.433%, which put Armenia at number 86 for world rankings. Looking ahead to 2010, professionals are forecasting an increase of 97.87%, which would put the year-end numbers at 6.79%. Going even further to 2015, forecasters estimate inflation will change to 4%.

Armenia Current Account Balance Forecast

Finally, the Armenia current account balance is also something that experts track and forecast. For 2008, this number was at $11.92 billion in US dollars but with a 26.88% reduction, the numbers changed for 2009 to $8.714 billion, putting the country in the number 125 slot for world rankings. For 2010, a small reduction of 5.11% is being predicted, closing out the year at $8.27 billion. By the end of 2015, the current account balance should hit $10.336 billion in United States dollars as forecasters say.


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