Publication: Armenia After the Crisis : Challenges and Opportunities - Policy Forum : Concept Note
Date
2010-09
ISSN
Published
2010-09
Author(s)
World Bank
Abstract
Armenia has a very small economy that
has carried out strong reforms in many areas over the past
decade and a half. It grew at a very fast pace prior to the
global crisis (about 12 percent on average between 2000 and
2007), in part due to a strong inflow of remittances and
Foreign Direct Investment (FDI). But exports (which are
highly concentrated around copper, molybdenum, and tourism)
stagnated from 2005 when growth in income per-capita
continued while exports per capita started to fall-thus the
bulk of Gross Domestic Product (GDP) growth was driven by
the non-tradable sectors and in particular construction. The
country was significantly hit by the global financial crisis
with output falling by over 14 percent last year. Looking
forward, the country faces a number of significant
constraints to its development-among others a complete
closure of two of its four borders, which raises transport
costs and reduces contestability in local markets. On the
other hand, the country's skill base is strong , and
some industries are strong or have a very strong potential
(tourism, mining, alcoholic products, and agro-businesses).
The post-crisis policy package includes - at the
macroeconomic level - the introduction of significantly more
flexibility of the exchange rate, and the implementation of
fiscal stabilization measures. At the micro-level the
authorities are promoting expansion of sectors such as
Information Technology (IT), tourism and agri-businesses.
Citation
“World Bank. 2010. Armenia After the Crisis : Challenges and Opportunities - Policy Forum : Concept Note. © Washington, DC. http://openknowledge.worldbank.org/entities/publication/d2a680ac-da1a-5319-a11d-1e601c09ce87 License: CC BY 3.0 IGO.”