Press Release No. 12/225
June 15, 2012
The Executive Board of the International Monetary Fund (IMF) today completed its fourth review of Armeniaթ§Չ-Չ§s economic performance under a program supported by Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements. The decision enables the authorities to draw an additional SDRթԹ 33.5թԹ million (about US$50.7թԹ million), bringing total disbursements under the arrangements to SDR 178.3 million (US$269.8թԹ million). The three-year SDRթԹ 266.8 million (US$403.8 million) EFF and ECF arrangements with Armenia were approved by the IMFթ§Չ-Չ§s Executive Board on June 28, 2010 (see Press Release No. 10/263). The Board’s decision on the fourth review was taken on a lapse of time basis.1
Adherence to the policies agreed under the Fund-supported program has played an important role in helping Armenia restore solid growth. The outlook for 2012 and the medium-term is positive, but not without risks, particularly stemming from Europe and affecting Armenia via Russia. Growth picked up to 4.6թԹ percent inթԹ 2011, but is expected to moderate to just below 4թԹ percent inթԹ 2012. Inflation has come down significantly over the past year and should remain near the central bankթ§Չ-Չ§s target of 4թԹ percent. Credit growth remains strong. The Board is also considering a Financial Sector Stability Assessment (FSSA) for Armenia, under the Financial Sector Assessment Program of the IMF and the World Bank.
TheթԹ 2011 fiscal deficit was well below program targets, reflecting restrained spending. The deficit is likely to be moderately higher inթԹ 2012, but still in line with the program, and with higher expected revenues allowing for increases in priority spending. The external current account deficit has declined significantly, helped by the fiscal adjustment, but remains high. The authorities plan to implement further business environment and tax and pension reform measures. Together with enhanced exchange rate flexibility, these actions should improve productivity and support growth and diversification of exports.
imf.org
photo by gbild.org
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