IMF Urges Armenia To Tackle Deficit


RTT News
Feb 18 2010

(RTTNews) – Armenia’s economy should recover this year after
contracting sharply in 2009, the International Monetary Fund said on
Wednesday, but urged the country to tackle its bulging budget deficit.

"After a very challenging year in 2009, output appears to have
stabilized and real GDP is expected to recover in 2010," Mark Lewis,
head of an IMF staff mission to Yerevan, said.

Armenia’s national output slumped 14.4% in 2009 while the government
forecast the economy to grow 1.2% this year.

Lewis said it was important that the Armenian government cut its
budget deficit. The government has pledged to bring down to deficit
to 6% of GDP by year-end from the current level of 7.5%.

"In light of debt sustainability concerns, the authorities should
gradually reduce the deficit and rely as much as possible on
concessional financing," said Lewis.

The staff mission also reached agreement with the government to extend
a tranche of $74 million in loan, as part of the stand-by arrangement
between the parties.

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