section_path: Economic impact by continent, region and country/Europe/Armenia
section_name: Armenia
paragraph_text: Armenia
  
  The Armenian Government tried to confront the influence of the pandemic by implementing mitigation measures plus a lockdown. This adversely impacted businesses in Armenia, which either shut down or did not work with the same capacity as before. One of the consequences of this was supply shock. The supply shock caused a sharp decrease in sales. Companies adopted policies like reduction of working hours and wages, and workforce reductions. This led to the reduction in per capita income.
  
  The IMF estimated that the contribution of the final consumption expenditure had diminished in 2020 by 2.1% (from 3.3% up to 1.2%). The production decreases led to a drop in corporate tax revenue. Moreover, public expenditures sharply increased to help companies and households. However, this caused a budget deficit and increasing external debt.
  
  The financial difficulties caused by the pandemic also affected loan repayments and led to a sharp decrease in savings. The Armenian National Statistical Service mentioned that in the first 3–4 months of 2020, wages were increased by 6.8%, which helped citizens during the pandemic. The United Nations assessed that the loan/GDP ratio, which stood at 52.1% as of September 2020, would lead to an overall decrease in loan portfolio performance, as many loans would go unpaid. The limitations on international travel during the pandemic affected the international trade of goods and services. Predictions of the IMF in 2020 assumed that there would be a decline (60% in total) of the influx of the personal remittances and foreign direct investments.
  
  Among all enterprises affected by international trade interruptions in the Central, Eastern regions, 63% reported taking steps to limit the damage, which is higher than the EU average. Central European enterprises are more likely than the EU generally to increase the number of trading partners to diversify risks from trade interruptions (45% against 37% in the EU).
  
  Around AMD 26 billion (US$55 million), according to official cost estimates, has been set aside for the implementation of the thirteen social assistance programs. The majority of spending (US$25 million) has gone toward providing salary support to workers in the impacted industry, followed by family benefits (US$15 million) and electricity bill subsidies (US$10 million). Each participant received a one-time benefit of between US$53 and US$270.
  
  Because of the pandemic, the economy of Armenia wasn't able to generate enough savings to finance investments. Concurrently, the Armenian economy was unable to generate enough exports to finance the imports, which caused an expanding trade deficit of around US$2.9 billion in 2019. The COVID-19 pandemic impacted the Armenian economy, and as a result the GDP dropped on average by 5.3% from January to August 2020.