Armenia

Politics:

• Analysis

  Armenia politics: Opposition challenger quits presidential race

  The president, Serzh Sargsyan, is on course to secure a second term in office following the unexpected withdrawal of his most popular challenger from the presidential race. The decision made by Gagik Tsarukian, a wealthy businessman who leads the Prosperous Armenia Party, the second-largest party in parliament, appears to have been the result either of strong governmental pressure or possibly a secret deal with Mr Sargsyan. It now seems unlikely that any other leader of the country's opposition forces will be capable of mounting a serious challenge against the incumbent president in the February 2013 election. Some of them had hoped to capitalise on his widely anticipated election showdown with Mr Tsarukian.

  Mr Tsarukian and his party had been expected to challenge Mr Sargsyan in the presidential election scheduled for February 18th, after the party left the governing coalition led by Mr Sargsyan's Republican Party of Armenia (RPA) following parliamentary elections held in May 2012. Tensions between Prosperous Armenia and the government rose further in October after law-enforcement authorities pressed controversial money-laundering charges against Vartan Oskanian, an ally of Mr Tsarukian and a former foreign minister. Prosperous Armenia denounced the criminal case as "political persecution" of not only Mr Oskanian but of the entire party.

  In November senior Prosperous Armenia representatives declared on a number of occasions that Mr Tsarukian would run for president. The tycoon himself stated on November 21st that he had "already made a decision", but would not publicise it yet. In what was widely regarded as a prelude to the announcement of his presidential bid, he visited Brussels on December 4th-6th to discuss the presidential election with EU officials. A Prosperous Armenia statement quoted Alejo Vidal-Quadras Roca, a vice-speaker of the European Parliament, saying that Mr Tsarukian would make a "great" presidential candidate. At the same time, Mr Tsarukian strongly criticised the Armenian government.

  Volte-face

  Mr Sargsyan's RPA condemned Mr Tsarukian's attacks on the government as "shameful", and branded Prosperous Armenia an "artificial force". The damage caused to the relationship between the two parties looked irreparable. However, the situation changed dramatically after Mr Sargsyan and Mr Tsarukian met in the Armenian capital, Yerevan, on December 8th. No details of that meeting were officially made public.

  Ensuing reports in the Armenian press said that Mr Tsarukian had decided not to run in the election. Prosperous Armenia denied those reports before finally announcing on December 12th that the party would not nominate or endorse any presidential candidates. It gave no explanation for the move, only insisting that its leader had not been forced to withdraw from the race. The ruling RPA also denied any government pressure on Mr Tsarukian.

  Like many other Armenian entrepreneurs, Mr Tsarukian is vulnerable to pressure from the authorities because of the weak rule of law in the country and his heavy reliance on government connections in doing business. He made much of his fortune during the 1998-2008 presidency of Robert Kocharian, Mr Sargsyan's predecessor, who is widely regarded as Prosperous Armenia's political patron. Companies owned by Mr Tsarukian have long posted suspiciously modest earnings contrasting with his conspicuous wealth, fuelling allegations of large-scale tax evasion. It is possible that the government could apply pressure to Mr Tsarukian through the use of tax audits. Mr Kocharian's enduring political clout may be the reason why there have been no such audits to date.

  Mr Kocharian will not run in the election either

  Mr Kocharian rushed to say through a spokesman on December 13th that he too would not run in the election. He had earlier repeatedly signaled his desire to return to active politics. The possibility of a return of Mr Kocharian to the political scene could explain why Prosperous Armenia had declined to endorse Mr Sargsyan's re-election plans and nearly fielded its own candidate. Another plausible reason for Mr Tsarukian's surprise decision is a new power-sharing deal with the presidential camp. Some senior RPA figures have not ruled out the possibility of Prosperous Armenia's return to the government after the February election.

  Mr Sargsyan's position gets a boost

  In any case, the development is a massive boost to Mr Sargsyan's chances of winning a second five-year term. The incumbent may be wielding vast administrative resources, which traditionally decide election outcomes in Armenia, but he has assured the EU and the US that the upcoming ballot will meet "the highest international standards".

  Mr Tsarukian was in a position to thwart Mr Sargsyan's smooth re-election bid through his strong populist appeal. None of Armenia's established opposition groups can match Mr Tsarukian's popularity, especially with low-income and working-class voters. Levon Ter-Petrosian, another former president who was Mr Sargsyan's main challenger in the previous presidential election, has lost much of his large following in the past few years, and is apparently reluctant to have another shot at the presidency. Mr Ter-Petrosian has actively courted Prosperous Armenia over the past year in the hope of taking advantage of its tussle with the RPA. He had even seemed ready to support Mr Tsarukian's presidential challenge, much to the dismay of many of his supporters who view Prosperous Armenia as an integral part of the ruling regime. Mr Tsarukian's exit from the race has put Mr Ter-Petrosian under greater pressure to run for president or have another candidate from his Armenian National Congress (ANC) alliance enter the fray-although no other candidate would be as popular as the charismatic ex-president.

  Only one opposition heavyweight, Raffi Hovannisian of the Heritage party, has officially announced his candidacy so far. Another major opposition party, the Armenian Revolutionary Federation (ARF), may also put forward a candidate. Official results of the May parliamentary elections showed Heritage and the ARF garnering just over 5% of the vote each, compared with 7% polled by the ANC. All three opposition forces consider those elections to have been fraudulent.

  The biggest risk for Mr Sargsyan is that many of the hundreds of thousands of Armenians who voted for Prosperous Armenia in May will back one of his opposition challengers in February. Although not resulting in regime change, every presidential election held in Armenia since 1996 has been competitive-at least by Commonwealth of Independent States (CIS) standards. Mr Sargsyan will therefore be seeking to ensure that the next vote is not followed by the post-election upheavals that came in the aftermath of the 2008 presidential election-and which seriously undermined the legitimacy of the vote.

  December 17, 2012

• Background

  Armenia: Key figures

  Robert Kocharian

  Mr Kocharian began his political career in Nagorny Karabakh, where he was president from 1994 to 1996. After the 1996 presidential election in Armenia he was appointed prime minister by Levon Ter-Petrosian, and was therefore well placed to succeed Mr Ter-Petrosian when the latter resigned in early 1998. Mr Kocharian has steadily strengthened his grip on power, particularly since the parliamentary assassinations of October 1999, which removed many of his rivals from the political scene. He won re-election in March 2003 in a poll that was severely criticised by international observers. Mr Kocharian is ineligible to contest another presidential term, but there is speculation that he will assume the prime ministership, in the event that Serzh Sarkisian—the front-runner—wins the presidency in 2008.

  Serzh Sarkisian

  Interior minister under both Mr Ter-Petrosian and Mr Kocharian, Mr Sarkisian established Orinats Yerkir (Country of Law) for the 1999 parliamentary election, but stood for the Republican Party of Armenia (RPA) in the 2003 parliamentary election. Mr Sarkisian is Mr Kocharian's most influential supporter, and is regarded by many as the power behind the throne. Reappointed defence minister following the 2003 election, he gave up his parliamentary mandate to remain in the government. In 2006, however, he formally joined the RPA, and was elected chairman of its governing council. In April 2007 he was appointed prime minister, following the sudden death of Andranik Markarian. He was poised to be reappointed in early June, following the RPA's better than expected performance in the parliamentary election. This will provide him with a strong platform from which to contest the presidency in early 2008.

  Gagik Tsarukian

  Mr Tsarukian, a former champion arm-wrestler, is one of Armenia's wealthiest businessmen. He founded Prosperous Armenia in early 2006, with the stated aim of creating a new political force in the country, and succeeded in attracting figures from across the political spectrum. It was rumoured that he established the party to create a support base for Mr Kocharian when he leaves the presidency in 2008. Prosperous Armenia ran a controversial election campaign: Mr Tsarukian had established a charity, also called Prosperous Armenia, which he used to distribute financial and other aid to poor areas, prompting accusations from other parties that he was vote-buying. Despite claiming as many as 370,000 members by January 2007, Prosperous Armenia only won around half of that number of votes in the May election, leaving Mr Tsarukian in a weaker position than had been expecting, although his party has joined the new government. Mr Tsarukian's close links with Armenia's political and business elite will ensure that he remains an influential figure.

  Artur Baghdasarian

  Leader of Orinats Yerkir—a junior partner in the three-party coalition government that came to power following the 2003 election—Mr Baghdasarian was speaker of the National Assembly (parliament) from mid-2003 to mid-2006. Relations between Orinats Yerkir and the RPA were periodically tense during the party's participation in government in these years, with Mr Baghdasarian critical of the coalition's record on issues such as corruption. He also advocated a more balanced foreign policy, and in particular closer relations with the West. Mr Baghdasarian withdrew his party from the government in May 2006, and went into opposition. Relations between Mr Baghdasarian and the government deteriorated throughout 2006 and into 2007, and in the run-up to the election the pro-government Golos Armenii (Voice of Armenia) newspaper published the transcript of a conversation, secretly recorded, between Mr Baghdasarian and a British diplomat, in which Mr Baghdasarian apparently urged the EU to criticise the conduct of the election. This prompted Mr Kocharian to accuse Mr Baghdasarian of treason. Although his party's parliamentary presence has declined, Mr Baghdasarian is likely to be a vocal opponent of the government in the National Assembly, and will be a leading opposition challenger in the 2008 presidential election.

  Raffi Hovannisian

  A lawyer by training, the US-born Mr Hovannisian was briefly Armenia's foreign minister in the early 1990s. He was ruled ineligible to contest elections before 2007, having not been resident in Armenia for the requisite ten years. Mr Hovannisian's Heritage party was controversially forced out of its offices in early 2006 by the authorities, but still managed to secure around 6% of the vote in the May 2007 election. Mr Hovannisian's lack of association with previous governments could be his strongest asset, should he seek to contest the presidency in 2008.

  June 19, 2007

• Structure

  Armenia: Political structure

  Official name

  Republic of Armenia

  Form of state

  The Republic of Armenia was independent between 1918 and 1921, but was incorporated into the Soviet Union in 1921. Following a referendum on September 21st 1991, Armenia became independent. A new constitution was adopted in July 1995 and revised in November 2005

  National legislature

  National Assembly with 131 deputies, of whom 41 are elected from single-member districts and 90 by party list

  National elections

  May 2012 (legislative) and February 2008 (presidential); next elections due in 2017 (legislative) and February 2013 (presidential)

  Head of state

  President, Serzh Sargsyan, directly elected in February 2008 for a five-year term

  National government

  The president appoints the prime minister, who appoints the members of government. The government in the parliamentary session from May 2007 to May 2012 was a coalition between the Republican Party of Armenia, Prosperous Armenia and Orinats Yerkir; the Armenian Revolutionary Federation withdrew from the coalition in April 2009. After the election in 2012, the Prosperous Armenia Party announced that it would not join the governing coalition. The Republican Party and Orinats Yerkir formed a governing coalition which was approved by parliament in June 2012

  Main political parties

  Armenian National Congress (ANC); Armenian National Movement; Armenian Revolutionary Federation (ARF; also known as Dashnaktsutiun); Christian Democratic Union of Armenia; Communist Party of Armenia; Hanrapetutiun (Republic); Heritage; Liberal Democratic Party; National Unity Party; National Democratic Union; National Party of Armenia; Orinats Yerkir (Rule of Law); People's Democratic Party; People's Party of Armenia; Prosperous Armenia Party (PAP); Republican Party of Armenia (RPA); United Labour Party

  Key ministers

  Prime minister: Tigran Sargsyan

  Agriculture: Sergo Karapetian

  Culture & youth: Hasmik Poghosian

  Defence: Seyran Ohanian

  Diaspora affairs: Hranush Hakobian

  Economy: Tigran Davtian

  Education & science: Armen Ashotian

  Emergency situations: Armen Yeritisian

  Energy & natural resources: Armen Movsisian

  Environmental protection: Aram Harutiunian

  Finance: Vache Gabrielian

  Foreign affairs: Eduard Nalbandian

  Health: Harutiun Kushkian

  Justice: Hrayr Tovmasian

  Labour & social affairs: Artur Grigorian

  Sport & youth affairs: Artur Petrosian

  Transport & communications: Manuk Vardanian

  Territorial administration: Armen Gevorgian

  Urban development: Vartan Vartanian

  Speaker of the National Assembly

  Hovik Abrahamyan

  Central Bank chairman

  Artur Javadian

  November 06, 2012

Economy:

• Background

  Armenia: Education

  Education spending begins to rise

  Following independence Armenia faced a drastic deterioration in its education system, along with other public services. In 1990 budgetary spending on education was equivalent to 6.6% of GDP, but by 2003 state budget spending on the sector (including science) had plummeted to below 2% of GDP. The authorities have begun to increase expenditure on education, as part of a poverty reduction strategy (see The economy: Economic policy). The 2007 budget envisages an increase of more than 10% in government spending on education, to Dram91.8bn (US$257m at the forecast exchange rate), equivalent to about 3% of GDP. Nevertheless, this is still low by comparison with OECD countries, where average expenditure on education is around 4-5% of GDP.

  Enrolment rates in primary and secondary education were 85% in 2001. The adult literacy rate is high, at almost 99% in 2003 according to estimates from the UN Educational, Scientific and Cultural Organisation (UNESCO), compared with about 96% in 1980. The dramatic drop in funding for education in the years since independence has made it nearly impossible for Armenia to maintain universal general education, or to meet the requirements of an emerging market economy and democratic society. In common with other members of the Commonwealth of Independent States (CIS), the lack of investment in education has caused a deterioration in physical infrastructure. Many schools and universities close in winter owing to energy shortages and lack of heat. There is a shortage of textbooks and teaching materials, and salaries are low, so that many highly qualified teachers and university professors leave the system for better-paid job opportunities elsewhere. The government is beginning to address these issues, for example by raising salaries for employees. Multilateral organisations, including the World Bank, have provided financial assistance for a variety of education projects, including a US$15m programme to improve schools' access to textbooks.

  June 19, 2007

• Structure

  Armenia: Economic structure

  Economic structure: Annual indicators

  	2008a	2009a	2010a	2011a	2012b
  GDP at market prices (Dram bn)	3,568.2	3,102.8	3,509.6	3,865.7b	4,039.2
  GDP (US$ bn)	11.7	8.5	9.4	10.4b	10.0
  Real GDP growth (%)	6.8	-14.4	2.2	4.7	4.5
  Consumer price inflation (av; %)	9.0	3.4	8.2	7.7	2.5
  Population (m)	3.1	3.1	3.1	3.1	3.1
  Exports of goods fob (US$ m)	1,112.0	748.9	1,175.4	1,578.0	1,547.0
  Imports of goods fob (US$ m)	3,775.6	2,830.1	3,208.0	3,664.5	3,302.1
  Current-account balance (US$ m)	-1,382.9	-1,369.5	-1,373.2	-1,120.2	-1,148.7
  Foreign-exchange reserves excl gold (US$ m)	1,406.8	2,003.6	1,865.8	1,932.5	2,024.1
  Exchange rate Dram:US$ (av)	306.0	363.3	373.7	372.5	402.3
  a Actual. b Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Main origins of gross domestic product 2011	% of total	Main components of gross domestic product 2011	% of total
  Agriculture	20.2	Private consumption	82.5
  Industry	16.7	Government consumption	13.7
  Retail trade	13.4	Gross fixed investment	26.3
  Construction	12.81	Change in stocks	1.6
  Financial services & real estate	6.3	Net exports of goods & services	-23.6
  		Statistical discrepancy	-0.9
  Principal exports fob 2011	% of total	Principal imports cif 2011	% of total
  Mineral products	30.0	Mineral products	19.8
  Base metals	27.4	Machinery & equipment	13.7
  Precious or semi-precious stones & metals	14.8	Prepared foodstuffs	8.4
  Prepared foodstuffs	13.8	Precious or semi-precious stones & metals	5.2
  Main destinations of exports 2011	% of total	Main origins of imports 2011	% of total
  Russia	14.1	Russia	17.4
  Bulgaria	12.8	China	7.1
  Germany	9.0	Germany	5.7
  Netherlands	8.5	Ukraine	5.6

  Download the numbers in Excel

  Download text file (csv format)

  November 06, 2012

• Outlook

  Armenia: Country outlook

  Armenia: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: The position of the Armenian president, Serzh Sargsyan, has remained stable in recent months, and the Economist Intelligence Unit expects him to stay in power until the presidential election in 2013. Attempts to improve relations with Turkey will be hard, as no progress has been made recently in the unresolved dispute with Azerbaijan, an important Turkish ally, over Nagorny Karabakh. The budget deficit will average 2.9% of GDP in 2012. Government restraint with spending, and improvements to tax and customs administration will help to keep the budget deficit in check. Real GDP growth is estimated at 4.5% in 2012. An improvement in domestic demand and a pick-up in export demand will see real GDP growth accelerate over the 2013-14 forecast period to reach 5.1% in 2014. A tight fiscal policy should help to keep inflation in check, and we expect it to remain within the authorities' target inflation band of 2.5-5.5% in 2013-14. The current-account deficit is estimated to have widened to 11.6% of GDP in 2012 as the weak external climate lowered export and remittance revenue. The deficit will narrow to 8.7% of GDP in 2014.

  DOMESTIC POLITICS: Political stability has increased as protests organised by the main opposition alliance, the Armenian National Congress (ANC), have dwindled since April 2011. Demonstrations held by the ANC following the parliamentary election in May 2012 attracted far fewer supporters than the estimated 10,000 who participated in the rally in April 2011. However, the public's lack of enthusiasm for the demonstrations has provided a boost to the position of the president. We expect Mr Sargsyan to be re-elected in February 2013. In the May election the ANC obtained parliamentary representation for the first time. This provided it with a legitimate avenue to set out its policy objectives, although its parliamentary presence is small (seven seats) and it has not yet posed a threat to the government's policy direction. The ANC's poor relationship with the other two main opposition parties-the Armenian Revolutionary Federation (also known as Dashnaktsutiun) and Heritage, both of which won seats in the election-will hinder the opposition's ability to change the status quo. Nonetheless, on some issues all three parties could put their differences aside and effect modest changes to the government's policy. There is a risk of further protests in 2013-14, particularly in the run-up to and aftermath of the presidential election. However, the economic recovery, following a deep recession in 2009, will help to reduce the risk of mass social unrest. The Republican Party of Armenia (RPA) won 44% of the vote in the parliamentary election in May 2012. Its junior coalition partner in the outgoing government, the Prosperous Armenia Party (PAP), won almost 31%. The ANC received 7%. International observers largely viewed the conduct of the election favourably, although they highlighted some areas of concern, such as the uneven playing field for candidates, which will need to be rectified ahead of the presidential election. The PAP, which was part of the governing coalition before the election, has indicated that it will not support Mr Sargsyan's re-election bid, reneging on an agreement from late 2011. There has been speculation that the ANC might support a PAP candidate, to try to prevent Mr Sargsyan from winning. However, this seems unlikely, owing to deep-seated divisions between the three main opposition parties. Our core scenario is that Mr Sargsyan will win. As in previous elections, the incumbent will benefit from access to administrative resources. Rivalry between the RPA and the PAP, and politics in general, will become more fractious in the run-up to the presidential election.

  INTERNATIONAL RELATIONS: Attempts by Turkey and Armenia to restore diplomatic ties remain stalled. In October 2009 Armenia and Turkey signed two protocols aimed at establishing diplomatic relations and reopening the border, which Turkey closed in 1993 in support of Azerbaijan's position in its frozen conflict with Armenia over the disputed territory of Nagorny Karabakh. However, no further progress towards a breakthrough has been made since, as the Nagorny Karabakh conflict has been an obstacle. Although the conflict was not mentioned in the protocols, the Turkish prime minister, Recep Tayyip Erdogan, has said that Turkish ratification of the protocols is not possible until a breakthrough occurs over Nagorny Karabakh. Mr Sargsyan objected to Turkey's decision to link improvements in the conflict to the bilateral protocols, and in April 2010 he suspended the parliamentary ratification process indefinitely. Progress in the normalisation of ties between Armenia and Azerbaijan will be slow in 2013-14. Tensions will remain and will occasionally flare up over particularly divisive issues. For example, the decision by the Azerbaijani president, Ilham Aliyev, to free and pardon a convicted murder, Ramil Safarov, in August sharply increased tensions with Armenia. Mr Safarov had been sentenced to life imprisonment in Hungary for the murder of a lieutenant in the Armenian army in Budapest (the Hungarian capital) in 2004. However, an agreement between Azerbaijan and Hungary resulted in him being extradited to Azerbaijan to serve out the remainder of his sentence. Armenia has been outraged by the release of Mr Safarov. A meeting was held with the Minsk Group of the Organisation for Security and Co-operation in Europe and the foreign ministers of Armenia and Azerbaijan in late October. At the meeting, both Azerbaijan and Armenia reiterated their commitment to reaching a peace agreement, although no tangible progress towards this aim was made. Border skirmishes will continue.

  POLICY TRENDS: Only a modest improvement in the external environment is expected in 2013, although the outlook for the global economy will improve more significantly in 2014. Weak external conditions and the ongoing repercussions of the global recession of 2009 will have implications for Armenia. Although the financial services sector is not greatly exposed to international capital markets, the country relies heavily on inflows of remittances and official transfers, and much of its export revenue is generated by commodities, particularly metals. We expect that export revenue and remittance inflows will continue to grow in 2013-14, but growth will be slower than in 2008. Government measures, including efforts to reduce fiscal spending and provide support to small and medium-sized enterprises, have put the economy in a better position ahead of the global economic slowdown in 2012 than before the recession of 2009. Financial support from multilateral organisations including the IMF and the World Bank should lead to improvements in the business environment and stimulate economic activity. The Fund agreed to cancel Armenia's Stand-By Arrangement in 2010, and switched support to an Extended Fund Facility and an Extended Credit Facility, which are together worth US$413m. The fourth tranche from the programme was disbursed in June 2012; the fifth tranche, worth US$52m, is scheduled to be released in December. The conclusions of the latest Fund mission to the country, in September, were positive overall, although the Fund urged the authorities to push ahead more swiftly with reforms of the tax administration. The Fund praised the government's commitment to narrowing the fiscal deficit and efforts that have kept inflation in check. Under guidance from multilateral organisations, the government will continue to make progress in tackling corruption within the tax and customs administrations, strengthening the rule of law, and ensuring fair business competition. However, given the close links between political and business circles, and the fact that the president relies on these circles for support, vested interests will present a significant obstacle to more open and transparent policies. The country's position in the Bank's Doing Business 2013 rose to 32, from 50. Significant improvements were seen in the scores for the ease of paying taxes and the level of protection offered to investors.

  ECONOMIC GROWTH: Real GDP increased by 4.7% year on year in 2011, up from 2.2% in 2010. In 2011 all the main sectors, barring construction, expanded in real terms. Growth was led by agriculture and industry. Industry continued to benefit from higher global prices for metals, the country's largest export. Agriculture, a large contributor to headline GDP, grew by 13.5% year on year-the steepest annual rise since 2004. Performance was boosted by an improvement in weather conditions. In 2012 second-quarter real GDP grew by 6.6% year on year, up from 5.6% in the first quarter. Agricultural output grew by a robust 11.8% in April-June (up from 1.8% in the first quarter) as agriculture escaped the impact of the drought that affected large parts of the Commonwealth of Independent States. Manufacturing output, the largest component of industrial output, rose by 8.5% in the second quarter (slower than 18.4% in January-March), and production of the smaller mining and quarrying subcomponent rose by 22.1%. Real GDP growth will be slower in the second half of 2012, largely owing to base effects. Nonetheless, a more robust performance than expected in the first half led us to revise up our estimate for real GDP in 2012 to 4.5% (from 3.6%). A modest improvement in external conditions will lead to forecast real GDP growth of 4.8% in 2013 and 5.1% in 2014. Our real GDP forecast for Russia-main export and investment partner-in 2013 is unchanged from 2012 (3.7%). The outlook for Russia is more favourable than for the US or the euro zone, and this will minimise the reduction in remittance inflows, as Russia is the main host for Armenian migrant workers. However, the weak global economic outlook will prevent a faster recovery in external demand for, and the price of, mining and metallurgy products. In addition, forecast weak global growth will hamper investment into Armenia. These factors will weigh on economic performance over 2013-14. Armenia is vulnerable to exogenous shocks. If the Russian economic outlook were to deteriorate more severely than we currently expect, this would pose a risk to our forecast. Consumer prices rose by 2.5% year on year in September, unchanged from August.

  EXTERNAL ACCOUNT: We estimate that the current-account deficit widened modestly in 2012, to 11.6% of GDP, from 10.8% of GDP in 2011 as lower demand for the country's main exports (metals and mineral products) weighs on export revenue. The current transfers surplus will be smaller than in 2011 as growth in remittance inflows for Armenian workers abroad slows owing to the weaker outlook for Russia, the main destination for Armenians working abroad. The current-account deficit will narrow gradually, to 8.7% of GDP in 2014. This will be driven by an increase in export revenue as global commodity prices for the country's main exports rise and demand increases. An increase in domestic demand and the improved outlook for capital-intensive sectors will lead to further increases in import demand. Nonetheless, we expect import growth to be slower than before 2009, owing to weaker domestic demand. The current transfers surplus will improve from 2013 as remittance inflows begin to pick up.

  November 07, 2012

View detailed map

Country Briefing

Total area

29,800 sq km, of which around 80% is mountainous

Population

3.09m (mid-2010)

Main towns

Yerevan (capital; population 1.1m); Gyumri; Vanadzor

Climate

Continental and dry, with cold winters and warm summers. The heaviest rainfall is in the mountains. The average temperature in July is 21°C; in January, the coldest month, it is -7°C

Languages

Armenian is the national language; Russian is widely spoken in towns

Weights and measures

Metric system

Currency

The Armenian dram was introduced as legal tender in November 1993 to replace the rouble. Average exchange rate in 2011: Dram372.5:US$1

Time

Four hours ahead of GMT

Public holidays

January 1st-2nd (New Year); January 6th (Christmas); January 28th (Army Day); March 8th (International Women's Day); April 24th (Armenian Genocide Commemoration Day); May 1st (International Workers' Day); May 9th (Victory Day); May 28th (Day of the First Republic); July 5th (Constitution Day); September 21st (Independence Day); December 31st (New Year's Eve)

August 16, 2012