The IMF has approved the provision of a credit facility of 248.2 million dollars to Armenia

The IMF has approved the provision of 36-month “Stand-Buy” type of credit facilities to Armenia in the amount of about 248.2 million US dollars. The Armenian authorities have indicated that they will consider the BM as a preventive measure and are not going to use the new BM funds until the shocks cause balance of payments problems.

The Central Bank informs that the Ministry of Finance will aim at strengthening RA’s economic fundamentals and policies, as well as implementing structural reforms, particularly effective management and improving the business environment.

The authorities continue to pursue a sustainable fiscal policy, guided by the fiscal rule, while creating the conditions to promote infrastructure and social spending.

The Executive Board of the International Monetary Fund (IMF) has approved the granting of a loan to Armenia in the amount of 180 million SDR (Special Drawing Right) for a period of 36 months (about 248.2 million USD or about 139.75 percent of Armenia’s quota in the IMF).

The Council confirms that PKR 25.714 million (equivalent to approximately US$35.5 million) is being provided to Armenia immediately, with the remaining amount to be provided based on six semi-annual assessments.

The Armenian authorities have indicated that they will consider the BM as a preventive measure and are not going to use the new BM if balance of payments problems do not arise due to shocks. In addition to the goal of insuring against shocks, the WM will support the RA authorities’ efforts to strengthen economic fundamentals and implemented policies. It will also contribute to the effective implementation of structural reforms, particularly the improvement of governance and business environment.

After the Executive Board’s discussion, Mitsuhiro Furusawa, Deputy Managing Director and Acting President, made the following statement.

“In recent years, Armenia continues to record progress in implementing structural reforms to maintain macroeconomic and financial stability, as well as promote economic growth. Economic activity has picked up and public debt has begun to decline. Inflation is under control, the financial system remains stable, and international reserves are rated adequate. However, reform efforts need to continue to ensure more balanced and inclusive growth by reducing disparities, improving the business environment and governance, and further efforts to reduce poverty. and to reduce unemployment.

The three-year MOU will support the authorities’ transition to a more dynamic, sustainable and inclusive economy. The preventive nature of VM will serve the purpose of insurance against external shocks. The authorities continue to implement fiscal policy through the implementation of the fiscal rule, while creating the environment required to promote infrastructure and social spending. The implementation of these tasks should be accompanied by the improvement of tax administration and measures aimed at the modernization of property taxation.

Further tightening of monetary policy will help to increase the effectiveness of monetary policy and return inflation to the medium-term objective. Measures will also be taken to protect the financial system, further develop capital markets and facilitate access to finance.

Decisive implementation of the measures envisaged in the robust package of structural reforms will contribute to ensuring sustainable and inclusive growth, which can be achieved by developing the private sector, attracting more direct investments and promoting diversification. Steps to improve human capital and increase labor force participation may also be helpful.”