Armenian economy lives its toughest days since the country gained its indepence. This happens due to two main reasons. First of these isthe war between Russia and Georgia in August, 2008.
The borders of Armenia with Turkey and Azerbaijan is closed andclosed borders with two neighboursincrease the importance of the borders with Iran and Georgia. Especially the border with Georgia is vital for Armenia. 90 percent of external trade is made over this route. And when Russia closed its borders to Georgia, following the conflict in August, Armenia lost its door to Russia and Western countries.
The second reason for Armenian economy’s fall is the Global economic recession. Global crisis triggered two things; fall in metal prices and decline in the money that comes from Armenian diaspora. By September 2009, Armenian exportation decreased by 41,1% and direct foreign investments decreased for an amount of $250 million,which brought itto a standstill.
In the first eight months of 2009, GDP shrinked by 18,4% and dropped to $4,987 billion from its previous value of $6,112 billion. Armenian government compensated the difference with taking loan. External debts of Armenia increased to $2,433 bln from $1,788 bln. Experts consider that this winter will be very tough for Armenian economy.
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