The Executive Board of the International Monetary Fund (IMF) completed the second review of the Republic of Armenia’s performance under the program supported by the Stand-By Arrangement (SBA).

Armenia’s three-year SBA of SDR 180 million (about US$248 million) was approved by the IMF’s Board on May 17, 2019..

The IMF Executive Board decision allows an immediate release of US$280 million for Armenia.

The augmentation of access will help the authorities contain short-term risks and will provide resources to meet the urgent human and economic implications of COVID-19 pandemic.

Following the Executive Board discussion, Tao Zhang, Deputy Managing Director and Chair, made the following statement:

“Following a strong performance in 2019, the Armenian economy was hit hard by the COVID-19 pandemic. The government has proactively responded to the crisis, adopting widespread containment measures while supporting vulnerable individuals and firms in the most affected sectors.

The fiscal deficit is projected to widen considerably in 2020, reflecting the impact of the cycle on revenues and higher current spending for healthcare and economic support to vulnerable households and firms. The authorities are committed to pursuing their medium-term goal of debt sustainability once the crisis abates, and public debt is expected to decline over the medium-term in line with Armenia’s fiscal rule, while maintaining space for investment and social spending.

The Central Bank of Armenia responded to the crisis by balancing its mandates for price and financial stability. To support the economy, the central bank lowered its policy rate and ensured ample market liquidity. It also intervened to limit excessive exchange rate volatility.

Implementation of the authorities’ reform agenda will bolster sustainable and inclusive growth. This includes efforts to establish a holistic anti-corruption framework, improve the business climate and support small and medium-sized enterprises, and strengthen the health and education sectors.

The augmentation of access under the Stand-by Arrangement will provide much needed support, allowing the authorities to mitigate the pandemic and support affected households and businesses.”