IMF DOUBLES ARMENIA 2010 GDP GROWTH VIEW TO 4 PCT
Hasmik Lazarian
Interactive Investor
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May 19 2010
YEREVAN, May 19 (Reuters) – The Armenian economy could grow as much as
4 percent in 2010, the International Monetary Fund said on Wednesday,
doubling its original forecast for the former Soviet republic and
promising it better loan terms.
Armenia’s gross domestic product (GDP) contracted 14.4 percent in 2009
due to a sharp fall in remittances and exports, a steep contraction in
the construction sector and a recession in close economic ally Russia.
"Growth is expected to rebound in 2010, external inflows are picking
up and public finances have improved," Mark Lewis, the IMF mission
chief, told reporters after completion of the Fund’s two-week visit
to the country.
"We revised our forecasts. For the GDP, in particular, growth will
be around 4 percent."
Armenia is currently drawing on an $823 million loan from the IMF,
of which it has already received $532 million.
Lewis said the rest of the current loan and some additional money —
to the total amount of $392 million — would be disbursed on more
concessionary terms, with the loan facility extended until 2013.
Lewis said the IMF mission and the government reached an agreement
under a new loan facility, which is to be approved by the Fund’s
board at the end of June.
Armenian’s GDP rose by 5.5 percent in the first quarter of this year in
comparison with a 6.1 percent contraction in the same period last year.
The IMF’s revised GDP forecast is more optimistic than the 2010
budget, which sees modest 1.2 percent economic growth, although
Armenian authorities believe it might be twice as much.
The budget sees 2010 inflation at 4.0 percent plus/minus 1.5 percentage
points. Last year, prices rose by 6.5 percent.
"Inflation has remained high due to various supply shocks, but should
come down gradually over the course of 2010… For the year it will
be 6 percent," Lewis said.
Lewis praised the government for a gradual reducing the budget
deficit. The IMF recommends reducing fiscal deficit to 6.0 percent
of the GDP in 2010 from 7.5 percent in 2009.
(Reporting by Hasmik Lazarian; writing by Margarita Antidze in
Tbilisi, editing by Jason Webb) Keywords: ARMENIA IMF/