Fter several years of double-digit economic growth, Armenia faced a severe economic recession with GDP declining more than 14% in 2009, despite large loans from multilateral institutions. Sharp declines in the construction sector and workers' remittances, particularly from Russia, led the downturn. The economy began to recover in 2010 with 2.1% growth, and picked up to 4.6% growth in 2011. Under the old Soviet central planning system, Armenia developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics, in exchange for raw materials and energy. Armenia has since switched to small-scale agriculture and away from the large agroindustrial complexes of the Soviet era. Armenia has managed to reduce poverty, slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to the sharp deterioration in the global economy and the economic downturn in Russia. The conflict with Azerbaijan over the ethnic Armenian-dominated region of Nagorno-Karabakh contributed to a severe economic decline in the early 1990s and Armenia's borders with Turkey remain closed. Armenia is particularly dependent on Russian commercial and governmental support and most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector. The electricity distribution system was privatized in 2002 and bought by Russia's RAO-UES in 2005. Natural gas is primarily imported from Russia but construction of a pipeline to deliver natural gas from Iran to Armenia was completed in December 2008, and gas deliveries expanded after the April 2010 completion of the Yerevan Thermal Power Plant. Armenia's severe trade imbalance has been offset somewhat by international aid, remittances from Armenians working abroad, and foreign direct investment. Armenia joined the WTO in January 2003. The government made some improvements in tax and customs administration in recent years, but anti-corruption measures have been ineffective and the economic downturn has led to a sharp drop in tax revenue and forced the government to accept large loan packages from Russia, the IMF, and other international financial institutions. Amendments to tax legislation, including the introduction of the first ever "luxury tax" in 2011, aim to increase the ratio of budget revenues to GDP, which still remains at low levels. Armenia will need to pursue additional economic reforms and to strengthen the rule of law in order to regain economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.

This is the Refinancing Rate, the key monetary policy instrument of the Armenian National Bank

Average lending rate on loans up to one year

$1.663 billion (31 December 2011 est.)

$1.201 billion (31 December 2010 est.)

$2.92 billion (31 December 2011 est.)

$3.708 billion (31 December 2010 est.)

$3.31 billion (31 December 2011)

$2.634 billion (31 December 2010)

$43.52 million (31 December 2011)

$27.99 million (31 December 2010)

$140.5 million (31 December 2009)

Fruit (especially grapes), vegetables; livestock

Diamond-processing, metal-cutting machine tools, forging-pressing machines, electric motors, tires, knitted wear, hosiery, shoes, silk fabric, chemicals, trucks, instruments, microelectronics, jewelry manufacturing, software development, food processing, brandy, mining

Armenia exports an unknown quantity to Georgia; includes exports to Nagorno-Karabakh region in Azerbaijan (2011 est.)

17 million kWh; note - imports an unknown quantity from Iran (2008 est.)

Pig iron, unwrought copper, nonferrous metals, diamonds, mineral products, foodstuffs, energy

Russia 15.4%, Germany 13.9%, Iran 9.8%, Bulgaria 9.3%, Netherlands 7.8%, US 7.6%, Spain 7.6%, Canada 5.7%, Belgium 5.5%, Georgia 4.6% (2011)

Natural gas, petroleum, tobacco products, foodstuffs, diamonds

Russia 20%, China 8.1%, Ukraine 6.8%, Iran 6.5%, Germany 5.9%, Italy 4.7% (2011)

$1.959 billion (31 December 2011 est.)

$1.866 billion (31 December 2010 est.)

$7.336 billion (30 September 2011)

$6.103 billion (31 December 2010 est.)