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Armenian Market : Main sectors

Armenia's economy is based on agriculture, mineral exploitation, hydroelectricity, telecommunications, jewellery, and tourism. Agriculture represents 11.2% of GDP and employs 24% of the total workforce (World Bank, latest data available). Armenia suffers from low levels of cultivation of arable land, limited resources and low growth potential due to political instability. Small and fragmented plots are used for subsistence agriculture. Main crops include potatoes, tomatoes, grapes, wheat and melons, cotton and tobacco. Armenia's livestock sector is also pivotal, representing almost 40% of the country’s gross agricultural product. The latest figures from FAO show that the 2021 total cereal output was forecast at about 208,000 tonnes, almost 30% below the average level; with the production of wheat (at about 120,000 tonnes) well below the five year average. This was due to a gradual reduction in planted areas that almost halved since 2015.

The industry contributes 27% of GDP and employs 17.5% of the total workforce. Armenia has copper, molybdenum, bauxite, zinc, lead, iron, gold, and mercury deposits, the basis of the country’s chemical industry sector and its main exports. The mining sector is one of the largest contributors to GDP and exports (especially metal ores). Hydroelectricity is very well developed in the country, to the point that Armenia is now exporting it (although most of it is foreign-owned). The manufacturing sector alone accounts for 12.4% of GDP (World Bank). According to official government data, the industrial output in January-November 2021 grew by 2.7% year-on-year to a little more than AMD 2.1 trillion.

Services represent 53.2% of GDP and employ 51.2% of the active population. The sector includes jewelry (particularly because of the size of its diamonds) and tourism. Banking, in particular, has grown: it is considered a solid and stable sector and is composed of 17 commercial banks (European Banking Federation). As the Covid-19 pandemic has severely affected the tourism sector, the EU announced a call for proposals to support Armenia's tourism industry. Nevertheless, the number of foreign tourists visiting Armenia in the first half of 2021 dropped to 239,263 from 307,590 who had visited the country in the same period one year earlier, according to the latest figures by the National Statistical Committee (NSC).


Main Products

2.5 bn USD of products exported in 2020
Copper ores and concentratesCopper ores and concentrates 24.1%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 10.2%
Cigars, cheroots, cigarillos and cigarettes of...Cigars, cheroots, cigarillos and cigarettes of tobacco or of tobacco substitutes 9.6%
Undenatured ethyl alcohol of an alcoholic strength...Undenatured ethyl alcohol of an alcoholic strength by volume of < 80%; spirits, liqueurs and other spirituous beverages (excl. compound alcoholic preparations of a kind used for the manufacture of beverages) 8.1%
Molybdenum ores and concentratesMolybdenum ores and concentrates 4.1%
See More Products 44.0%
4.6 bn USD of products imported in 2020
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 9.7%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 5.3%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.9%
Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 2.3%
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 2.0%
See More Products 77.8%

Source: Comtrade, Latest Available Data

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 24.0 24.8 51.2
Value Added (in % of GDP) 11.7 26.4 53.3
Value Added (Annual % Change) -4.0 -2.2 -9.1

Source: World Bank - Latest available data.


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Type of Production
For the resources for businesses on managing the manufacturing and the supply chain risk due to the outbreak of the Covid19 pandemic, please consult the report COVID-19: Managing supply chain risk and disruption (Deloitte Canada, 2020), as well as the insights on COVID-19: How to fortify your supply chain (Kearney, 2020).
The World Economic Forum's COVID Action Platform provides useful information on the latest strategic trends regarding COVID-19 implications for businesses, including manufacturing and supply systems. The report Outbreak Readiness and Business Impact (World Economic Forum in collaboration with the Harvard Global Health Institute) offers insights on handling coronavirus by businesses and strategies for effective response and resilience.

Armenia's industrial sector contributes 45% to the GDP. Agriculture, IT sector, Electronics and Precision Engineering, Mining, Chemical and Pharmaceuticals, Jewelry and Diamonds processing, Textile and Clothing constitute the main industries.

Armenia's IT sector receives significant attention as a possible growth industry. It currently employs between 3,500 and 4,000 people. Besides, productivity is high and wages low in comparison with Europe and the USA, and the level of education is quite high, thus making this sector quite competitive.

The clothing sector shows also great prospects. Cheap labor, existing factories and a positive trade regime (including free access to CIS markets) create favorable conditions for investment in light industries like textiles, carpets, footwear and apparel.

Construction has been the leading sector of the economy for the past six years. The sector accounts for 26% of the country's GDP. Growth in construction is mainly driven by an increased demand for higher quality housing funded primarily by remittances. Diaspora Armenians seeking a base in Armenia have also significantly contributed to the sector's demand.

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Latest Update: July 2022