Armenia ranks as the most economically free nation in the CIS

(www.heritage.org)

Armenia was included in a list of countries with a high degree of economic freedom in 2006 occupying 27th place, higher than France, according to the annual survey "Index of Economic Freedom" conducted by the Heritage Foundation / the Wall Street Journal.

The appraisal of economic freedom is based on 50 economic indicators within the following categories: capital flows and foreign investments; banking and financial systems; monetary, budget and trade polices; salaries and prices; state interference in the economy; property rights and regulations; and black markets.

Armenia was included in a list of countries with a high degree of economic freedom in 2004 occupying 44th place together with France according to the annual survey “Index of Economic Freedom” conducted by the Heritage Foundation /the Wall Street Journal/.

Armenia has a successful record of transition creating a favorable macroeconomic climate based on a market economy. There has been consistent growth since 1994. The country has successfully implemented a comprehensive stabilization and structural reform program. In 1993, thefirststockexchange was established and the new currency, the Dram, was introduced.

Index of Economy Freedom, 2000-2006

GDP Structure from 1996 to 2005 (%)

Inflation

Since 1998 the inflation rate has stabilized at a low level thus promoting economic growth in the economy. According to official data provided by the Central Bank of Armenia, the average inflation rate for 2003 was 4.7% and for 2004 was 7.0%. In 2005, it was 2.2%.

Education / Labor Force

The majority of people (56%) are between the ages of 17 and 59 and the level of education is high. Education continues to be one of the main values in Armenian society. Today, there are 18 state universities, 8 foreign managed (American University, French University, European University and 5 Russian universities) and the remainder are private. There are more than 77,000 third-level students.

Exports and Imports of Armenia

Due to stable economic growth and an open trade system, exports have increased considerably since 1999, accompanied by import substitution as a result of an increase in domestic production. Exports increased by 5.1% in 1999 while import growth was negative, at -10.1%. In 2004 exports and imports increased by 4.3% and 5.6 % respectively. In 2005 the growth trend of exports was continued at 34.2%. For the same period, the main export countries were: CIS countries (18.9%); EU (46.6%); Israel (13.6%); and USA (6.5%).

Exports and Imports Growth Rate from 1999 to 2005

Main Export and Import Countries of Armenia

Main Export and Import Products of Armenia in 2004,2003 and 2002(%).

Privatization

Small-scale privatization began in May 1991, which was followed by large-scale privatization from 1995.
Almost 95% of medium and small enterprises had been privatized by May 2002. More than 100 large size enterprises were also privatized.

In 2005,51 companies were privatized, 31 through direct sale, 17 through tender and 3 through auction.The total income from privatization during 2005 was 1,310,439,200 AMD.