THE FINANCIAL SYSTEM REMAINS STABLE:IMF MISSION CONCLUDES THE VISIT TO ARMENIA
armradio.am
12.10.2009 16:02
A mission of Executive Directors of the International Monetary Fund
(IMF) comprising Ms. Meg Lundsager, Messrs. Age Bakker, Ambroise
Fayolle, HE Jianxiong, Thomas Moser, and Klaus D. Stein, issued the
following statement on October 12, 2009 in Yerevan at the conclusion
of its visit to Armenia:
"We are grateful for the opportunity to visit the country and thank
the people of Armenia, President Serzh Sargsyan, Prime Minister
Tigran Sargsyan, Chairman of the Central Bank Arthur Javadyan,
Minister of Finance Tigran Davtyan, and Minister of Economy Nerses
Yeritsyan for their warm hospitality and productive discussions. Our
visit has offered us a unique opportunity to hold discussions with a
wide range of stakeholders, including representatives of the public
and private sectors, the civil society, and development partners.
"Armenia has been severely hit by the global crisis, with real GDP
expected to decline by about 15 percent in 2009. Foreign inflows
have fallen and tax revenues have dropped, which have weakened the
balance of payments and the public finances. These developments posed
additional hardships on the Armenian population.
"We commend the authorities for efficiently addressing these
challenges.
Fiscal policy continues to be expansionary, given that, with the
help of the IMF and other donors, t he government has been able to
keep expenditures close to the original 2009 budget, while increasing
spending on priority infrastructure projects.
"The financial system remains stable and the return to a floating
exchange rate on March 3, 2009 has been a success. The Central Bank
(CBA) has expanded its instruments to provide liquidity to the banking
system in order to stimulate credit to the private sector. At the
same time, inflation is on track to meet the authorities’ end-2009
target of 4+1.5 percent.
"Continued progress in tax and customs administration reforms will be
critical to ensuring sound public finances, and a fair and equitable
tax burden. Once the economy recovers, the government will need to
reduce the fiscal deficit to preserve medium-term fiscal and debt
sustainability, while continuing to support needed public spending
and investment.
"We welcome promising signs for regional cooperation, which will help
economic development in the region. We support the IMF continuing
excellent relationship with the Armenian authorities."