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STATEMENT AT THE CONCLUSION OF AN IMF STAFF MISSION TO ARMENIA
Targeted News Service
December 23, 2013 Monday 11:55 PM EST
WASHINGTON
The International Monetary Fund issued the following news release:
An International Monetary Fund (IMF) mission led by Mark Horton visited
Yerevan during December 9-18 to continue discussions on a possible
new 38-months Extended Fund Facility (EFF) arrangement. The mission
met with Prime Minister Tigran Sargsyan, Minister of Finance David
Sargsyan, Central Bank of Armenia Chairman Artur Javadyan, Minister of
Economy Vahram Avanesyan, Minister of Energy and Natural Resources
Armen Movsisyan, and Minister-Chief of Staff of the Government
Vache Gabrielyan, as well as other senior government officials and
representatives of the international community and the banking and
business sectors.
At the conclusion of the visit, Mr. Horton issued the following
statement:
"Armenia has made significant progress in recovering from the global
crisis and reorienting its economy, but important challenges remain.
These include responding to the slowdown of growth in 2013, low
private and foreign direct investment in recent years, and relatively
high poverty and unemployment. The external current account deficit
has been reduced significantly since 2009, including in 2013, but
it remains relatively high. While there has been important progress
on structural reforms, including in the financial sector, pensions,
social benefits, and civil aviation, further business environment
improvements are needed to strengthen competition, competitiveness,
and connectivity. These actions would help shift private activity
to investment and boost exports. In other areas, such as the energy
sector, actions are needed to better assess and mitigate risks.
"The new program under discussion would aim at consolidating stability
and implementing further reforms to support Armenia's transition
to a dynamic emerging market economy. In 2014, the budget deficit
is expected to increase with higher capital spending and wage and
pension increases. From 2015, the program would target a continued
increase of capital spending, along with a gradual reduction of the
fiscal deficit. Better risk analysis, improved compliance, a more
level playing field, and closing of tax gaps would support stronger
revenues for social and investment needs and deficit reduction. This
would place public debt on a downward path. Monetary and exchange
rate policies would continue to target low inflation and support the
external adjustment. The Central Bank of Armenia would maintain its
buffers at healthy levels and strengthen its capacity to respond to
shocks. The program would also support measures to promote financial
sector deepening and further improve the business environment,
including by strengthening Armenia's legal framework in these areas.
The program would aim to promote higher investment, exports, and
growth, and in turn, help to reduce poverty and unemployment.
"The Fund mission and the authorities made significant progress
in discussions on policies and actions for 2014-17 that would be
supported by a possible new EFF arrangement. Further discussions are
expected during the next few weeks."
Targeted News Service
December 23, 2013 Monday 11:55 PM EST
WASHINGTON
The International Monetary Fund issued the following news release:
An International Monetary Fund (IMF) mission led by Mark Horton visited
Yerevan during December 9-18 to continue discussions on a possible
new 38-months Extended Fund Facility (EFF) arrangement. The mission
met with Prime Minister Tigran Sargsyan, Minister of Finance David
Sargsyan, Central Bank of Armenia Chairman Artur Javadyan, Minister of
Economy Vahram Avanesyan, Minister of Energy and Natural Resources
Armen Movsisyan, and Minister-Chief of Staff of the Government
Vache Gabrielyan, as well as other senior government officials and
representatives of the international community and the banking and
business sectors.
At the conclusion of the visit, Mr. Horton issued the following
statement:
"Armenia has made significant progress in recovering from the global
crisis and reorienting its economy, but important challenges remain.
These include responding to the slowdown of growth in 2013, low
private and foreign direct investment in recent years, and relatively
high poverty and unemployment. The external current account deficit
has been reduced significantly since 2009, including in 2013, but
it remains relatively high. While there has been important progress
on structural reforms, including in the financial sector, pensions,
social benefits, and civil aviation, further business environment
improvements are needed to strengthen competition, competitiveness,
and connectivity. These actions would help shift private activity
to investment and boost exports. In other areas, such as the energy
sector, actions are needed to better assess and mitigate risks.
"The new program under discussion would aim at consolidating stability
and implementing further reforms to support Armenia's transition
to a dynamic emerging market economy. In 2014, the budget deficit
is expected to increase with higher capital spending and wage and
pension increases. From 2015, the program would target a continued
increase of capital spending, along with a gradual reduction of the
fiscal deficit. Better risk analysis, improved compliance, a more
level playing field, and closing of tax gaps would support stronger
revenues for social and investment needs and deficit reduction. This
would place public debt on a downward path. Monetary and exchange
rate policies would continue to target low inflation and support the
external adjustment. The Central Bank of Armenia would maintain its
buffers at healthy levels and strengthen its capacity to respond to
shocks. The program would also support measures to promote financial
sector deepening and further improve the business environment,
including by strengthening Armenia's legal framework in these areas.
The program would aim to promote higher investment, exports, and
growth, and in turn, help to reduce poverty and unemployment.
"The Fund mission and the authorities made significant progress
in discussions on policies and actions for 2014-17 that would be
supported by a possible new EFF arrangement. Further discussions are
expected during the next few weeks."