[26] While part of the Soviet Union, the economy of Armenia was based largely on manufacturing industry—chemicals, electronic products, machinery, processed food, synthetic rubber and textiles; it was highly dependent on outside resources.

Under the old Soviet central planning system, Armenia had developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics in exchange for raw materials and energy.

Once this occurred, the main goal of the Soviet economic policy in Armenia was to turn a predominantly agrarian and rural republic into an industrial and urban one.

[39] The Stalinist command economy, in which market forces were suppressed and all orders for production and distribution came from the state authorities, survived in all its essential features until the fall of the Soviet regime in 1991.

In large part due to the earthquake of 1988, the Azerbaijani blockade that began in 1989 and the collapse of the international trading system of the Soviet Union, the Armenian economy of the early 1990s remained far below its 1980 production levels.

[43] Cooperatives were set up in the service sector, particularly in restaurants, although substantial resistance came from the Communist Party of Armenia (CPA) and other groups that had enjoyed privileged position in the old economy.

The so-called mafia, made up of interconnected groups of powerful officials and their relatives and friends, sabotaged the efforts of reformers to create a lawful market system.

[45] Beginning in 1991, the democratically elected government pushed vigorously for privatisation and market relations, although its efforts were frustrated by the old ways of doing business in Armenia, the Azerbaijani blockade, and the costs of the First Nagorno-Karabakh War.

Besides a toy factory and construction projects, diaspora Armenians built a cold storage plant (which in its first years had little produce to store) and established the American University of Armenia in Yerevan to teach the techniques necessary to run a market economy.

A year later, the government complained that those organisations were holding back financial assistance and announced its intention to move toward fuller price liberalisation, and the removal of all tariffs, quotas, and restrictions of foreign trade.

New sectors, such as precious stone processing and jewelry making and communication technology (primarily Armentel, which is left from the USSR era and is owned by external investors).

These loans are targeted at reducing the budget deficit, stabilizing the local currency; developing private businesses; energy; the agriculture, food processing, transportation, and health and education sectors; and ongoing rehabilitation work in the earthquake zone.

Armenia is now a net energy exporter, although it does not have sufficient generating capacity to replace the Metsamor nuclear plant, which is under international pressure to close due to its old design.

[72] By comparing the share of agriculture as a component of GDP with the neighboring countries (Georgia, Azerbaijan, Turkey, Iran) one can notice that the percentage is highest for Armenia.

Aimed at the sector's development on November 15, 2021, the Silicon Mountains Summit dedicated to introducing intelligent solutions in the economy was held in Yerevan.

[106] Cash remittances from Armenians working abroad — mostly in Russia and the United States — contribute significantly to Armenia's Gross Domestic Product making up 14% of GDP in 2018.

According to RFE/RL, comparable sums are believed to be transferred through non-bank systems, implying that cash remittances make up approximately 30 percent of Armenia's GDP in the first half of 2008.

[108] According to the Central Bank of Armenia, in 2005, cash remittances from Armenians working abroad reached a record-high level of $1 billion, which is worth more than one fifth of the country's 2005 GDP.

Full implementation of the buffers over the course of the next few years will strengthen the financial sector's resistance to economic shocks and help increase the efficiency of macroprudential policies.

[136] Bilateral trade with Russia stood at more than $700 million for the first nine months of 2010 – on track to rebound to $1 billion mark first reached in 2008 prior to the global economic crisis.

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.

[147] The tax haven Jersey is home to an Anglo-American company, Lydian International, which is currently building a controversial massive gold mine in the southeastern Vayots Dzor Province.

FDI stock to GDP ratio grew continuously during 2014–2016 and reached 44.1% in 2016, surpassing average figures for Commonwealth of Independent States countries, transition economies and the world.

The Compact also includes a $146 million project to increase the productivity of approximately 250,000 farm households through improved water supply, higher yields, higher-value crops, and a more competitive agricultural sector.

[162] In October 2009, when visiting Yerevan, the World Bank’s managing director, Ngozi Okonjo-Iweala, warned that Armenia will not reach a higher level of development unless its leadership changes the "oligopolistic" structure of the national economy, bolsters the rule of law and shows "zero tolerance" towards corruption.

She also called for a sweeping reform of tax and customs administration, the creation of a "strong and independent judicial system" as well as a tough fight against government corruption.

Furthermore, Aghajanov points to the Armenian government's failure to eliminate widespread corruption and mismanagement in the energy sector – abuses that cost Armenia at least $50 million in losses each year, according to one estimate.

The Upper Lars border crossing (at Darial Gorge) between Georgia and Russia across the Caucasus Mountains serves as Armenia's sole overland route to the former Soviet Union and Europe.

[159]Statistical Committee of Armenia publication based on data retrieved from employers and national income service cites 560,586 payroll positions in January 2019, an increase of 9.9% against previous year.

[190] The strong economic growth of 2021 and 2022 led to a significant drop in unemployment to 15.3% and 13% respectively,[198] causing a substantial reduction in the proportion of the population living below the World Bank upper-middle income economy poverty threshold of $6.85 per day, from 51.7% in 2021 to 37.6% in 2023.