Statement At The Conclusion Of IMF Staff Mission To Armenia

STATEMENT AT THE CONCLUSION OF IMF STAFF MISSION TO ARMENIA

US Fed News
September 22, 2011 Thursday 7:36 PM EST

WASHINGTON, Sept. 22 — The International Monetary Fund issued the
following news release:

An International Monetary Fund (IMF) mission led by Mr. Mark Horton
visited Yerevan during September 7 – September 20 to conduct
discussions for the Third Review of the Extended Fund Facility
(EFF)/Extended Credit Facility (ECF) arrangements. At the conclusion
of the visit, Mr. Horton issued the following statement:

“Discussions were productive and there was progress on the set
of policies and actions for the rest of 2011 and 2012. Further
discussions will be conducted in Washington, DC during the Annual
Meetings of the IMF and the World Bank later this week.

“Overall macroeconomic conditions have improved. As a result of a
rebound in the agricultural sector and dynamic industry and services
sectors, growth outturns are set to improve this year in line with
our previous projection of 4.6 percent growth. With less supportive
external conditions, the growth projection was reduced to 4 percent
in 2012 with risks markedly tilted to the downside. Inflation has
significantly moderated, driven by falling global commodity prices
and the agricultural rebound. Headline inflation reached 4.8 percent
in August (year over year), and is expected to remain subdued in the
rest of 2011 and 2012.

“Program performance remains broadly satisfactory. The fiscal balance
has continued to improve, with the overall deficit expected to come
down to below 4 percent in 2011 from 5 percent in 2010. In order to
ensure debt sustainability, the deficit is expected to continue to
be reduced in 2012. However, the government still expects to create
fiscal space to support private sector-led growth and reduce poverty
with the implementation of a strong package to increase tax revenues.

The package will be based on new legislative initiatives and renewed
tax administration efforts.

“The Central Bank continues to show a commitment to a flexible
exchange rate and the inflation targeting regime, engaging in limited
foreign exchange interventions to smooth volatility. Central Bank
also continues to further improving tools to monitor risks in the
banking system.

“The structural agenda continues to progress, with signs of improvement
in the business environment mainly in the area of inspection,
competition legislation, business registration processes, and VAT
refunds.

“The mission met with President Serzh Sargsyan, Prime Minister Tigran
Sargsyan, Minister of Finance Vache Gabrielyan, Central Bank Governor
Arthur Javadyan, Minister of Economy Tigran Davtyan, Minister of Energy
and Natural Resources Armen Movsisyan, Minister of Agriculture Sergo
Karapetyan, as well as senior government officials, representatives
of the international community, the banking and business sectors,
and civil society. The mission would like to thank the authorities
and the citizens of Armenia for their warmth and hospitality.”

From: Baghdasarian

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