Country Profile Armenia

President: Serzh Sargsyan

Capital (and Largest City): Yerevan

Population (2011): 2,872,000

Total Area: 29,743 km²

Official Language: Armenian

Currency: Armenian Dram (AMD)

Armenia, officially the Republic of Armenia, is a sovereign state in the South Caucasus region of Eurasia. Located in West Asia on the Armenian Highlands. It is bordered by Turkey to the west, Georgia to the north, the de facto independent Nagorno-Karabakh Republic and Azerbaijan to the east, and Iran and Azerbaijan's exclave of Nakhichevan to the south. The Republic of Armenia constitutes only one-tenth of historical Armenia.

Armenia has a small lower-middle-income economy. Armenia’s national and regional contexts show that the country is at an inflection point. Since 2000, growth has slowed, and with it, the rate of poverty reduction. Some deceleration is due to the weaker performance of the country’s main trading partners and a slowdown in remittance-providing countries. Although poverty reduction has been impressive, a large proportion of people in Armenia are still vulnerable. Persistent disparities indicate that a deeper understanding of the causes and possible solutions is needed, bearing in mind that the economy is still heavily dependent on mineral resources, services and agriculture. On January 2, 2015, Armenia joined the Eurasian Economic Union (EEU), withdrawing from the process of implementing the steps toward the AA and the DCFTA being negotiated with the EU in 2013. By joining the EEU, Armenia gets to benefit from all the customs union has to offer, while not having to carry out the complicated reforms, some of which are mandatory under the AA and the DCFTA frameworks. However, Armenia and the EU continue their political and trade dialogue in areas where this is compatible with Armenia’s participation to the EEU.

On March 21, 2017, the EU and Armenia initialed the EU-Armenia Comprehensive and Enhanced Partnership Agreement. The Agreement will be an important step to broaden the scope of bilateral relations between the parties. It will strengthen the political dialogue and set a solid basis for the continuation of economic and social reforms, thus bringing their relations to a new and higher level.

Armenia’s transition from a semi-presidential system to a parliamentary republic is close to complete. Parliamentary elections in April 2017 were conducted according to the amended Constitution and a new electoral law, and the president will be elected by parliament rather than popular vote in spring 2018.

Transparency, accountability, and corruption are crucial concerns in the country. With higher public debt (5.6 billion USD as of September, 2016) and damaged business confidence, the macroeconomic framework has been severely damaged. Other challenges that Armenia faces are large-scale emigration (about 30,000 per year), poverty (officially 29.8% of population),social and political problems, etc.

Armenia’s medium-term outlook remains sensitive to internal and external factors, entailing both upside and downside risks.