Tweet
IMF RELEASED STATEMENT ON CONCLUSION OF STAFF MISSION TO ARMENIA
Economic News (Information Agency Oreanda)
October 3, 2012 Wednesday
Russia
Yerevan. OREANDA-NEWS . October 3, 2012. An IMF mission led by Mark
Horton visited Yerevan during September 518 to conduct discussions
for the Fifth Review of the Extended Fund Facility/Extended Credit
Facility arrangements and the 2012 Article IV consultations. After
return to IMF headquarters, Mr. Horton made the following statement:
Macroeconomic conditions have continued to improve over the past year.
With a positive harvest and dynamic mining and services sectors,
growth is expected to reach 6.2 percent in 2012 and to moderate to 4.3
percent in 2013, as the economy returns to trend and given conditions
in Europe and Russia. Inflation remains moderate, driven by the
agricultural rebound and a sound policy framework, and is expected
to remain within the target band (41.5 percent) of the Central Bank
of Armenia (CBA) during the rest of 2012 and in 2013.
Program performance remains broadly satisfactory. The fiscal balance
has continued to improve, with the deficit expected to decline to
about 2 percent of GDP in 2012, and to increase moderately to 2.6
percent next year as large capital projects are implemented.
The CBA has shown strengthened commitment to a flexible exchange rate
and the inflation-targeting regime. The CBA continues to improve its
monetary policy tools and its monitoring of risks, particularly those
associated with foreign currency lending. An external shock beginning
in the second quarter of 2012 led to sizeable intervention in the
foreign exchange market to prevent excessive volatility, and the
end-June performance criterion on reserves was missed.
A waiver and corrective actions will be needed to complete the
Fifth Review.
Structural reforms are progressing, although at a slower-than-desirable
pace. A level playing field for all businessesincluding in the key
area of tax administrationwould be an important breakthrough for the
business environment. The mission looks forward to the first results
of the Regulatory Guillotine project, which aims at substantially
streamlining regulation and red-tape, and to ongoing enforcement
actions by the Competition Committee.
The mission reached preliminary agreement on a policy framework for
the rest of 2012 and 2013 that could form the basis for completion of
the review. The IMF Board is tentatively scheduled to consider the
review in early December. Upon approval, the IMF would disburse USD
52 million, bringing total disbursements under the EFF/ECF to about
USD 327 million.
The authorities expressed strong interest in a follow-up IMF
arrangement, after the current program concludes in mid-2013,
and possibly covering the next 3 years. They noted that a new
program would provide policy support for continued external and
fiscal adjustment, strengthened policy buffers and fiscal space,
and growth-enhancing structural reforms during a period of elevated
repayment of crisis-related assistance. Before discussions on a new
Fund program can begin, the IMF Board should consider the findings of
an Ex Post Assessment (EPA) of Fund programs since 2005, when the last
EPA was completed. The findings of the EPA, now under preparation,
will also help guide design of the new program.
The mission met with 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 Transport Gagik Beglaryan,
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 other
Armenian representatives for their warmth and hospitality.
Economic News (Information Agency Oreanda)
October 3, 2012 Wednesday
Russia
Yerevan. OREANDA-NEWS . October 3, 2012. An IMF mission led by Mark
Horton visited Yerevan during September 518 to conduct discussions
for the Fifth Review of the Extended Fund Facility/Extended Credit
Facility arrangements and the 2012 Article IV consultations. After
return to IMF headquarters, Mr. Horton made the following statement:
Macroeconomic conditions have continued to improve over the past year.
With a positive harvest and dynamic mining and services sectors,
growth is expected to reach 6.2 percent in 2012 and to moderate to 4.3
percent in 2013, as the economy returns to trend and given conditions
in Europe and Russia. Inflation remains moderate, driven by the
agricultural rebound and a sound policy framework, and is expected
to remain within the target band (41.5 percent) of the Central Bank
of Armenia (CBA) during the rest of 2012 and in 2013.
Program performance remains broadly satisfactory. The fiscal balance
has continued to improve, with the deficit expected to decline to
about 2 percent of GDP in 2012, and to increase moderately to 2.6
percent next year as large capital projects are implemented.
The CBA has shown strengthened commitment to a flexible exchange rate
and the inflation-targeting regime. The CBA continues to improve its
monetary policy tools and its monitoring of risks, particularly those
associated with foreign currency lending. An external shock beginning
in the second quarter of 2012 led to sizeable intervention in the
foreign exchange market to prevent excessive volatility, and the
end-June performance criterion on reserves was missed.
A waiver and corrective actions will be needed to complete the
Fifth Review.
Structural reforms are progressing, although at a slower-than-desirable
pace. A level playing field for all businessesincluding in the key
area of tax administrationwould be an important breakthrough for the
business environment. The mission looks forward to the first results
of the Regulatory Guillotine project, which aims at substantially
streamlining regulation and red-tape, and to ongoing enforcement
actions by the Competition Committee.
The mission reached preliminary agreement on a policy framework for
the rest of 2012 and 2013 that could form the basis for completion of
the review. The IMF Board is tentatively scheduled to consider the
review in early December. Upon approval, the IMF would disburse USD
52 million, bringing total disbursements under the EFF/ECF to about
USD 327 million.
The authorities expressed strong interest in a follow-up IMF
arrangement, after the current program concludes in mid-2013,
and possibly covering the next 3 years. They noted that a new
program would provide policy support for continued external and
fiscal adjustment, strengthened policy buffers and fiscal space,
and growth-enhancing structural reforms during a period of elevated
repayment of crisis-related assistance. Before discussions on a new
Fund program can begin, the IMF Board should consider the findings of
an Ex Post Assessment (EPA) of Fund programs since 2005, when the last
EPA was completed. The findings of the EPA, now under preparation,
will also help guide design of the new program.
The mission met with 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 Transport Gagik Beglaryan,
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 other
Armenian representatives for their warmth and hospitality.