Armenia Economic Structure
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Armenia economic structure is highly dependent on the agricultural productivity and industrial performance, particularly the construction sector. After years of high economic growth in the 2000s, the Armenian economy plunged into severe budget deficit due to the impact of global recession.[br]
Armenia economic structure is highly dependent on the agricultural productivity and industrial performance, particularly the construction sector. After years of high economic growth in the 2000s, the Armenian economy plunged into severe budget deficit due to the impact of global recession.[br]
Armenia Economic Structure: Sector-wise GDP Composition
Traditionally, Armenia economic structure consisted of large agricultural sector and a small scale agro-industrial complex. Since the disintegration of Soviet Union, the country has developed its service sector as well, particularly in partnership with private and foreign investors.
Armenia faces several impediments to economic growth. It is a geographically isolated country and is highly dependent on the growth of Russian economy. A narrow export base also makes the economy vulnerable to global financial crisis. Another key problem is the economic dependency on the agricultural sector. As per 2009 figures, agriculture contributes 18.6% share of the GDP. However, it employs 46.2% of the working population. Low agricultural output results from the use of archaic methods of farming. Industry (33.5%) and service (48%) have the majority share in the country’s GDP.
Armenia has a large construction sector that is highly focused on housing development. High employment rate and low turnover in the construction sector also hampers the growth of the service sector in the country.
Armenia Economic Structure: Business Environment
According to a United States Agency for International Development (USAID) report, the business environment in Armenia is favorable, as against other comparable countries. The country has a liberalized approach towards private and foreign investment. However, corruption and lack of infrastructure are main concern for business development. Dedicated budget share is required for education and health sector reforms. Massive unemployment is another area of concern for the government.[br]
Strong growth of Armenia during 2000-08 is fueled by worker remittances and monetary assistances from donor agencies. Both the units exert influence on political and business policies of the country.
