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Economy of Armenia

Beginning of Article:

The Armenian economy contracted sharply in 2020, by 5.7%.

This was due to a combination of different causes. The two biggest contributing factors were the Coronavirus pandemic and the Second Nagorno-Karabakh War. In the first half of 2020, the Armenian economy was negatively impacted by the economic restrictions that were implemented in order to combat the Coronavirus pandemic. According to the World Bank, individual consumption dropped by 9% in the first six months of 2020. This drop in consumer consumption was due to the stay at home order that was intended to combat the spread of COVID-19. However, without significant government support to offset lost wages, inflation climbed to over 4% during the 2020 calendar year.

Armenia's war of defense against Azerbaijan was ended by the November 10th Document, signed by embattled Prime Minister Nikol Pashinyan. The document allowed for the subsequent Azeri occupation of much of the Karabakh region. This occupation has led to over one hundred thousand Armenians being forced to leave their homes and businesses behind. Early in the war, the central government mobilized the country. Private businesses were converted into public ones, producing masks and military equipment. Many factories were converted from private-use to public, and this negatively impacted the economic output from the nation.

Iran Section:

Armenia's trade with Iran grew significantly from 2015 and 2020. Because Armenia's land borders to the east and west have been closed by the governments of Turkey and Azerbaijan, domestic firms have looked to Iran as a key economic partner. In 2020, trade between the countries exceeded $300 million despite the Coronavirus pandemic providing a general dampening effect on all trade in the region. In January 2021, Iran's finance minister Farhad Dejpasand said that trade between the two countries could reach $1 billion annually as Iran looks to become a regional economic force.