## Republic of Armenia: Joint Staff Advisory Note on the Poverty Reduction Strategy Paper Progress Report

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---

### I. Introduction
- Coverage period: implementation from August 2003 to end-2004.
- PRSP milestones:
  - PRSP presented to the Boards of IDA and the IMF in November 2003.
  - PRSP Implementation Action Plan approved by the government in January 2004.
- Staffs’ overall assessment:
  - Evidence of stronger than anticipated poverty reduction and economic performance.
  - Improvements in the labor market.
  - Notable accomplishments in fiscal policy and social service delivery.
  - Progress on issues raised in the previous JSA: improved monitoring and evaluation, participation, and aligning the budget process with the PRSP.
  - Areas needing further attention: deepening poverty analysis, reforming tax and customs administrations, promoting financial intermediation, rural development, and private sector development.
- External support: IDA via a Poverty Reduction Support Credit (PRSC) and the IMF via a Poverty Reduction and Growth Facility (PRGF).

### II. Poverty Diagnostic — Findings and Analytical Priorities
- Key poverty and inequality outcomes:
  - Overall poverty reduced from around 50 percent in 2000–01 to 42.9 percent in 2003 (below the PRSP target).
  - Extreme poverty dropped from 16 percent in 2001 to 7.4 percent in 2003.
  - Gini coefficient fell from 0.535 in 2001 to 0.434 in 2003.
- Attributed drivers of faster-than-anticipated poverty reduction:
  - Double-digit economic growth.
  - Increase of labor income.
  - Increased social transfers via a well-targeted family poverty benefits program.
- Data and analysis:
  - Commendable degree of poverty information availability to researchers and the public.
  - Alternative consumption baskets/definitions indicate even larger declines in poverty in 2003.
- Staff recommendations for deeper analytical work:
  - Analyze the role and functioning of labor markets.
  - Analyze the structure of poverty in secondary towns.
  - Analyze the role of migration and remittances.
  - Further analyze and address policies to improve wellbeing of vulnerable groups, notably households with three or more children (poverty reduction was achieved for all vulnerable groups except households with three or more children).
- Institutional work:
  - IDA and National Statistics Service undertaking a joint programmatic poverty assessment to establish a shared consumption basket and definition and strengthen in-house capacity.

### III. Priority Areas for Public Actions

- A. Macroeconomic Framework and Sustainable Growth — Performance and Risks
  - Growth and inflation:
    - Real GDP growth of 13.9 percent in 2003 and 10.1 percent in 2004.
    - PRSP target growth was 6–7 percent per year.
    - End-of-period inflation declined from 8.6 percent in 2003 to 2 percent in 2004.
  - External debt and exchange rate:
    - Present value of debt-to-GDP ratio declined from 28.4 percent in 2002 to about 20 percent in 2004.
    - Real effective exchange rate appreciation of the dram by 6.7 percent in 2004; prior real effective depreciation of 23 percent between 2000 and 2003.
    - Staffs encourage vigilance on macroeconomic vulnerabilities and monitoring exchange rate developments and economic impact in the next Progress Report.
  - Labor market and private sector:
    - Labor income rose; official unemployment rate declined marginally in 2004.
    - Need for greater focus on private sector development to generate jobs and reduce poverty.
    - Business surveys (300 enterprises in 2003 and 2004) show reduced time and cost to register businesses and obtain licenses, but continued problems with fair competition and equitable treatment by customs and tax authorities.
    - Government has a time-bound action plan to improve the private sector environment; staffs encourage rigorous implementation and reporting.
  - Financial sector:
    - Limited discussion in the Progress Report; recent steps taken:
      - Improved banking supervision.
      - Strengthening creditor rights.
      - Clarifying procedures for collateral registration and foreclosure.
      - Enforcing commercial contracts.
    - Staffs urge continued effort: strengthen corporate governance of banks, facilitate new financial products such as housing finance, and report on FSAP update recommendations in the next Progress Report.

- B. Fiscal and Budgetary Management — Achievements and Reform Priorities
  - Fiscal framework and budgeting:
    - Introduction of 2004–06 and 2005–07 Medium-Term Expenditure Frameworks (MTEFs).
    - Line ministries actively participated in MTEF design; MTEFs integrated into 2004 and 2005 annual budgets.
    - Consolidated government deficits: 0.9 percent of GDP in 2003 and 2.2 percent of GDP in 2004.
    - Evidence of expenditure switching toward activities with high impacts on poverty reduction.
  - Revenue mobilization:
    - Revenues were above targets in absolute terms but below targets as a percent of GDP due to strong growth in tax-exempt sectors and non-receipt of external grants.
    - Collections improved in 2004 by 0.2 percent of GDP.
    - Deficiencies in tax and customs administrations (including corruption) impede efficient revenue mobilization.
    - Staffs’ reform priorities for tax administration:
      - Large taxpayer unit reform.
      - Introduction of self-assessment.
      - Reduction in arrears and improved tax practices.
      - More effective audits, including permitting off-site audits and increasing time allowed for audits.
      - Introduction of risk-based systems for audits and VAT refund processing.
    - Staffs encourage removal of remaining tax holidays and exemptions per government schedule.
    - Customs reform priorities:
      - Self-declaration and direct trade data input.
      - Selectivity of customs control.
      - Improvement in post-control audit functions.
      - Declining reliance on reference prices for import valuation in favor of transaction prices.
  - Public expenditure management:
    - Substantial progress implementing recommendations of the 2003 Public Expenditure Review.
    - Government adopted an action plan to structure the budget around programs and is piloting in four ministries.
    - Need to improve consistency of annual and quarterly budgets with outturns, prepare a public investment plan (PIP), and implement monitoring system improvements for noncommercial organizations (NCOs).
    - Additional attention recommended on:
      - Improvement in public procurement.
      - Translating the adopted anti-corruption strategy into specific actions, especially in tax and customs administration reforms.
      - Improvement in judiciary independence.
      - Development of transparent internal and external audit systems.
      - Upgrading public sector accounting and reporting systems.
    - Fiscal composition:
      - Staffs suggest continuing reductions in nonpriority current spending and corresponding increases in priority public investments, accompanied by improved expenditure classification in line with best international standards (Government Finance Statistics Manual 2001).

- C. Delivering Social Services — Spending, Targets, and Programmes
  - Social spending:
    - Absolute social sector funding increased significantly; as a percent of GDP it dipped below target in 2003 and recovered roughly to the target level in 2004.
    - Staffs encourage improved ability to track pro-poor funding to enhance targeting.
  - Education:
    - Progress in school rationalization, increased spending in 2003 and 2004, higher teacher salaries and increased training.
    - Education spending rose from 2.2 percent of GDP in 2002 to 2.7 percent in 2004 (PRSP target).
    - Government initiated policy formulation on early childhood education; intends to ensure financial sustainability with focus on those in general need.
    - Government intends to develop new financing mechanisms in tertiary education to increase access and improve financial transparency and efficiency.
    - Staffs note need to address facility problems (including heating) and encourage reporting on this in the next Progress Report.
    - Staffs note further increases in education spending are necessary as GDP grows to reach the PRSP target of 3.0 percent of GDP in 2005.
  - Health:
    - Government adopted an action plan on hospital governance, increased spending in 2003 and 2004, and took measures for secured financing and management of primary health care departments of Polyclinics.
    - Health spending rose from 1.2 percent of GDP in 2002 to 1.3 percent in 2004, short of the 1.5 percent target (Progress Report) and the PRSP target of 1.8 percent of GDP in 2005.
    - Progress includes facility mergers to improve efficiency and reported reductions in child and maternal mortality; government intends to strengthen accuracy of these statistics.
    - Staffs urge continued hospital rationalization, improved health care worker training, and development of private insurance options for certain health risks.
  - Social protection:
    - Targeted cash family poverty benefits remain a major pillar of the safety net.
    - Government introduced measures to improve administration of these benefits, including better monitoring and evaluation and a more streamlined appeals procedure.
    - Social insurance: satisfactory progress in introducing individual accounts in pension systems, improving collection of social insurance contributions, and increasing pensions.
    - Implementation begun of the state pension law envisaging stronger links between pensions and contributions.
    - Staffs encourage maintaining targeting of family benefits and further strengthening focus on the most vulnerable.

- D. Improving Infrastructure and Modernizing Rural Areas
  - Infrastructure achievements and gaps:
    - Good progress through investments and moves toward sustainable tariff structures in water supply and energy.
    - Improvements cited: energy efficiency in irrigation and increased budget for roads construction.
    - Staffs suggest further work on market rules in the energy sector, service and quality standards, and publication of operating companies’ financial results.
  - Rural infrastructure and development:
    - Government completed a diagnostic study on rural infrastructure services (drinking water, roads, gas, electricity, and telecommunication).
    - Need to clarify policies, ownership of assets, responsibilities for service provision and operations and maintenance to facilitate investment in rural services.
    - Staffs encourage innovative public-private partnerships in infrastructure given public investment limits.
  - Agriculture:
    - Growth in the agriculture sector was 14.5 percent in 2004.
    - Rural poverty remains a key concern.
    - Staffs request more detailed discussion in the next Progress Report on:
      - Role of agriculture in reducing rural poverty.
      - Analysis of the proposed system of crop insurance.
      - Functioning of land markets and the use of land as collateral in rural areas.
  - Environment:
    - The Progress Report lacks information on government actions in the area of the environment; staffs note the omission.

### Participation, Coordination, and Monitoring
- Participation and consultation:
  - Staffs commend authorities for further deepening consultation and participation during PRSP implementation.
  - Government actions:
    - Continued organization of regional workshops and specialized working groups around reform themes.
    - In the fall of 2004, revamping of the PRSP steering committee into a participatory steering committee with participation of government, parliament, civil society, and donors.
    - Establishment of an Open Forum to hear the voices of a wider range of stakeholders.
  - Staffs encourage maintaining this emphasis and reaching out to those with limited voice.
- Donor coordination:
  - Donors have generally integrated efforts behind the PRSP, although coordination remains largely led by donors.
  - German technical assistance (through GTZ) supports the PRSP secretariat in the Ministry of Finance and Economy.
  - Other donors such as the UN and EU provide financial support for PRSP activities.
  - The United States supports PRSP activities through USAID and now through the Millennium Challenge Corporation (MCC), for which Armenia has become eligible.
  - Despite efforts by the Ministry of Finance and Economy and line ministries, most coordination is still led by donors through donor sectoral working groups.
  - Staffs emphasize the importance of donors continuing to harmonize activities and for the government to take a more active role in donor coordination, including strengthening the administrative setup in the government to undertake this task effectively.
- Monitoring and evaluation:
  - A Monitoring Task Force was created in November 2003, with independent expert participation.
  - The government established a set of 177 indicators, harmonized to the extent possible with the Millennium Development Goals.
  - Complementary publication: the fifth annual publication of a larger analysis of data as a Social Snapshot in November 2004.
  - Data are made widely available, including through the web (www.prsp.am).
  - Staffs encourage complementing quantitative measures with quality indicators, particularly for health and education services, and presenting how indicators compare with other countries.

### Conclusions
- Overall assessment:
  - Armenia had a successful first year of PRSP implementation in which most targets have been met or exceeded and which was marked by a high level of consultation and participation.
  - PRSP policies and priorities have been progressively integrated into the MTEF and the annual budget process.
  - The PRSP Progress Report provides a rich set of information on PRSP implementation to help donors assess progress.
- Areas requiring greater effort (as listed in the Progress Report):
  - (i) Strengthening the business environment and promoting financial intermediation;
  - (ii) Deepening analysis of poverty, particularly with regard to secondary towns and rural areas;
  - (iii) Continuing to implement tax and customs reform to further increase tax collections;
  - (iv) Deepening reforms in health and education oriented toward raising the quality of services;
  - (v) Further strengthening the approach to rural development including the provision of infrastructure and social services.
- Additional observations and recommendations:
  - Armenia has put into place a comprehensive MTEF process and is preparing an action plan for modernizing its laws and regulations under the European Neighborhood Policy (ENP).
  - The government could benefit from bringing together the PRSP implementation processes with the ENP action plan.
  - Given the progressive integration of the PRSP process into the MTEF and budget process, staffs suggest future PRSP Progress Reports could take the form of a brief document that assesses progress and is attached to the MTEF documents rather than prepared separately.
  - The current Progress Report recognizes the need to revise original PRSP targets and target indicators by the end of 2005, given that many of them have been significantly exceeded. The staffs welcome the planned update and consider it important to maintain the PRSP expenditure targets for the social sectors as a percent of GDP.

*International Development Association and International Monetary Fund — Joint Staff Advisory Note on the Poverty Reduction Strategy Paper Progress Report (Republic of Armenia), Approved April 8, 2005. (Source: _cr05176)*

### Section 1

### Republic of Armenia: Joint Staff Advisory Note on the Poverty Reduction Strategy Paper Progress Report

### I. Introduction
- The PRSP Progress Report covers implementation from August 2003 to end-2004.
- The PRSP was presented to the Boards of IDA and the IMF in November 2003; a PRSP Implementation Action Plan was approved by the government in January 2004.
- Staffs’ overall assessment:
  - Evidence of stronger than anticipated poverty reduction and economic performance.
  - Improvements in the labor market.
  - Notable accomplishments in fiscal policy and social service delivery.
  - Progress on issues raised in the previous JSA: improved monitoring and evaluation, participation, and aligning the budget process with the PRSP.
  - Areas needing further attention: deepening poverty analysis, reforming tax and customs administrations, promoting financial intermediation, rural development, and private sector development.
- Support: IDA via a Poverty Reduction Support Credit (PRSC) and the IMF via a Poverty Reduction and Growth Facility (PRGF).

### II. Poverty Diagnostic — Findings and Analytical Priorities
- Key poverty and inequality outcomes:
  - Overall poverty reduced from around 50 percent in 2000–01 to 42.9 percent in 2003 (below the PRSP target).
  - Extreme poverty dropped from 16 percent in 2001 to 7.4 percent in 2003.
  - Gini coefficient fell from 0.535 in 2001 to 0.434 in 2003.
- Attributed drivers of faster-than-anticipated poverty reduction: double-digit economic growth, increase of labor income, and increased social transfers via a well-targeted family poverty benefits program.
- Data accessibility: commendable degree of poverty information availability to researchers and the public; alternative consumption baskets/definitions indicate even larger declines in poverty in 2003.
- Staff recommendations for deeper analytical work:
  - Analyze the role and functioning of labor markets.
  - Analyze the structure of poverty in secondary towns.
  - Analyze the role of migration and remittances.
  - Further analyze and address policies to improve wellbeing of vulnerable groups, notably households with three or more children (poverty reduction was achieved for all vulnerable groups except households with three or more children).
- Institutional work: IDA and National Statistics Service undertaking a joint programmatic poverty assessment to establish a shared consumption basket and definition and strengthen in-house capacity.

### III. Priority Areas for Public Actions

#### A. Macroeconomic Framework and Sustainable Growth — Performance and Risks
- Growth and inflation:
  - Real GDP growth of 13.9 percent in 2003 and 10.1 percent in 2004.
  - PRSP target growth was 6–7 percent per year.
  - End-of-period inflation declined from 8.6 percent in 2003 to 2 percent in 2004.
- External debt and exchange rate:
  - Present value of debt-to-GDP ratio declined from 28.4 percent in 2002 to about 20 percent in 2004.
  - Real effective exchange rate appreciation of the dram by 6.7 percent in 2004; prior real effective depreciation of 23 percent between 2000 and 2003.
  - Staffs encourage vigilance on macroeconomic vulnerabilities and monitoring exchange rate developments and economic impact in the next Progress Report.
- Labor market and private sector:
  - Labor income rose; official unemployment rate declined marginally in 2004.
  - Need for greater focus on private sector development to generate jobs and reduce poverty.
  - Business surveys (300 enterprises in 2003 and 2004) show reduced time and cost to register businesses and obtain licenses, but continued problems with fair competition and equitable treatment by customs and tax authorities.
  - Government has a time-bound action plan to improve the private sector environment; staffs encourage rigorous implementation and reporting.
- Financial sector:
  - Limited discussion in the Progress Report; recent steps taken:
    - Improved banking supervision.
    - Strengthening creditor rights.
    - Clarifying procedures for collateral registration and foreclosure.
    - Enforcing commercial contracts.
  - Staffs urge continued effort: strengthen corporate governance of banks, facilitate new financial products such as housing finance, and report on FSAP update recommendations in the next Progress Report.

#### B. Fiscal and Budgetary Management — Achievements and Reform Priorities
- Fiscal framework and budgeting:
  - Introduction of 2004–06 and 2005–07 Medium-Term Expenditure Frameworks (MTEFs).
  - Line ministries actively participated in MTEF design; MTEFs integrated into 2004 and 2005 annual budgets.
  - Consolidated government deficits: 0.9 percent of GDP in 2003 and 2.2 percent of GDP in 2004.
  - Evidence of expenditure switching toward activities with high impacts on poverty reduction.
- Revenue mobilization:
  - Revenues were above targets in absolute terms but below targets as a percent of GDP due to strong growth in tax-exempt sectors and non-receipt of external grants.
  - Collections improved in 2004 by 0.2 percent of GDP.
  - Deficiencies in tax and customs administrations (including corruption) impede efficient revenue mobilization.
  - Staffs’ reform priorities for tax administration:
    - Large taxpayer unit reform.
    - Introduction of self-assessment.
    - Reduction in arrears and improved tax practices.
    - More effective audits, including permitting off-site audits and increasing time allowed for audits.
    - Introduction of risk-based systems for audits and VAT refund processing.
  - Staffs encourage removal of remaining tax holidays and exemptions per government schedule.
  - Customs reform priorities:
    - Self-declaration and direct trade data input.
    - Selectivity of customs control.
    - Improvement in post-control audit functions.
    - Declining reliance on reference prices for import valuation in favor of transaction prices.
- Public expenditure management:
  - Substantial progress implementing recommendations of the 2003 Public Expenditure Review.
  - Government adopted an action plan to structure the budget around programs and is piloting in four ministries.
  - Need to improve consistency of annual and quarterly budgets with outturns, prepare a public investment plan (PIP), and implement monitoring system improvements for noncommercial organizations (NCOs).
  - Additional attention recommended on:
    - Improvement in public procurement.
    - Translating the adopted anti-corruption strategy into specific actions, especially in tax and customs administration reforms.
    - Improvement in judiciary independence.
    - Development of transparent internal and external audit systems.
    - Upgrading public sector accounting and reporting systems.
  - Fiscal composition: staffs suggest continuing reductions in nonpriority current spending and corresponding increases in priority public investments, accompanied by improved expenditure classification in line with best international standards (Government Finance Statistics Manual 2001).

#### C. Delivering Social Services — Spending, Targets, and Programmes
- Social spending:
  - Absolute social sector funding increased significantly; as a percent of GDP it dipped below target in 2003 and recovered roughly to the target level in 2004.
  - Staffs encourage improved ability to track pro-poor funding to enhance targeting.
- Education:
  - Progress in school rationalization, increased spending in 2003 and 2004, higher teacher salaries and increased training.
  - Education spending rose from 2.2 percent of GDP in 2002 to 2.7 percent in 2004 (PRSP target).
  - Government initiated policy formulation on early childhood education; intends to ensure financial sustainability with focus on those in general need.
  - Government intends to develop new financing mechanisms in tertiary education to increase access and improve financial transparency and efficiency.
  - Staffs note need to address facility problems (including heating) and encourage reporting on this in the next Progress Report.
  - Staffs note further increases in education spending are necessary as GDP grows to reach the PRSP target of 3.0 percent of GDP in 2005.
- Health:
  - Government adopted an action plan on hospital governance, increased spending in 2003 and 2004, and took measures for secured financing and management of primary health care departments of Polyclinics.
  - Health spending rose from 1.2 percent of GDP in 2002 to 1.3 percent in 2004, short of the 1.5 percent target (Progress Report) and the PRSP target of 1.8 percent of GDP in 2005.
  - Progress includes facility mergers to improve efficiency and reported reductions in child and maternal mortality; government intends to strengthen accuracy of these statistics.
  - Staffs urge continued hospital rationalization, improved health care worker training, and development of private insurance options for certain health risks.
- Social protection:
  - Targeted cash family poverty benefits remain a major pillar of the safety net.
  - Government introduced measures to improve administration of these benefits, including better monitoring and evaluation and a more streamlined appeals procedure.
  - Social insurance: satisfactory progress in introducing individual accounts in pension systems, improving collection of social insurance contributions, and increasing pensions.
  - Implementation begun of the state pension law envisaging stronger links between pensions and contributions.
  - Staffs encourage maintaining targeting of family benefits and further strengthening focus on the most vulnerable.

#### D. Improving Infrastructure and Modernizing Rural Areas
- Infrastructure achievements and gaps:
  - Good progress through investments and moves toward sustainable tariff structures in water supply and energy.
  - Improvements cited: energy efficiency in irrigation and increased budget for roads construction.
  - Staffs suggest further work on market rules in the energy sector, service and quality standards, and publication of operating companies’ financial results.
- Rural infrastructure and development:
  - Government completed a diagnostic study on rural infrastructure services (drinking water, roads, gas, electricity, and telecommunication).
  - Need to clarify policies, ownership of assets, responsibilities for service provision and operations and maintenance to facilitate investment in rural services.
  - Staffs encourage innovative public-private partnerships in infrastructure given public investment limits.
- Agriculture:
  - Growth in the agriculture sector was 14.5 percent in 2004.
  - Rural poverty remains a key concern.
  - Staffs request more detailed discussion in the next Progress Report on:
    - Role of agriculture in reducing rural poverty.
    - Analysis of the proposed system of crop insurance.
    - Functioning of land markets and the use of land as collateral in rural areas.
- Environment:
  - The Progress Report lacks information on government actions in the area of the environment; staffs note the omission.

_International Development Association and International Monetary Fund — Joint Staff Advisory Note on the Poverty Reduction Strategy Paper Progress Report (Republic of Armenia), Approved April 8, 2005._

### Section 2

### Section 2

### Participation, Coordination, and Monitoring

- The staffs commend the authorities for further deepening consultation and participation during PRSP implementation.
- Government actions noted:
  - Continued organization of regional workshops and specialized working groups around reform themes.
  - In the fall of 2004, revamping of the PRSP steering committee into a participatory steering committee with participation of government, parliament, civil society, and donors.
  - Establishment of an Open Forum to hear the voices of a wider range of stakeholders.
- The participatory and transparent process is highlighted as a strength of the Armenia PRSP process; staffs encourage maintaining this emphasis and reaching out to those with limited voice.
- Donor coordination:
  - Donors have generally integrated efforts behind the PRSP, although coordination remains largely led by donors.
  - German technical assistance (through GTZ) supports the PRSP secretariat in the Ministry of Finance and Economy.
  - Other donors such as the UN and EU provide financial support for PRSP activities.
  - The United States supports PRSP activities through USAID and now through the Millennium Challenge Corporation (MCC), for which Armenia has become eligible.
  - Despite efforts by the Ministry of Finance and Economy and line ministries, most coordination is still led by donors through donor sectoral working groups.
  - Staffs emphasize the importance of donors continuing to harmonize activities and for the government to take a more active role in donor coordination, including strengthening the administrative setup in the government to undertake this task effectively.
- Monitoring and evaluation:
  - A Monitoring Task Force was created in November 2003, with independent expert participation.
  - The government established a set of 177 indicators, harmonized to the extent possible with the Millennium Development Goals.
  - Complementary publication: the fifth annual publication of a larger analysis of data as a Social Snapshot in November 2004.
  - Data are made widely available, including through the web (www.prsp.am).
  - Staffs encourage complementing quantitative measures with quality indicators, particularly for health and education services, and presenting how indicators compare with other countries.

### Conclusions

- Overall assessment:
  - Armenia had a successful first year of PRSP implementation in which most targets have been met or exceeded and which was marked by a high level of consultation and participation.
  - PRSP policies and priorities have been progressively integrated into the MTEF and the annual budget process.
  - The PRSP Progress Report provides a rich set of information on PRSP implementation to help donors assess progress.
- Areas requiring greater effort (as listed in the Progress Report):
  - (i) Strengthening the business environment and promoting financial intermediation;
  - (ii) Deepening analysis of poverty, particularly with regard to secondary towns and rural areas;
  - (iii) Continuing to implement tax and customs reform to further increase tax collections;
  - (iv) Deepening reforms in health and education oriented toward raising the quality of services;
  - (v) Further strengthening the approach to rural development including the provision of infrastructure and social services.
- Additional observations and recommendations:
  - Armenia has put into place a comprehensive MTEF process and is preparing an action plan for modernizing its laws and regulations under the European Neighborhood Policy (ENP).
  - The government could benefit from bringing together the PRSP implementation processes with the ENP action plan.
  - Given the progressive integration of the PRSP process into the MTEF and budget process, staffs suggest future PRSP Progress Reports could take the form of a brief document that assesses progress and is attached to the MTEF documents rather than prepared separately.
  - The current Progress Report recognizes the need to revise original PRSP targets and target indicators by the end of 2005, given that many of them have been significantly exceeded. The staffs welcome the planned update and consider it important to maintain the PRSP expenditure targets for the social sectors as a percent of GDP.

*Source: _cr05176 - Section 2*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05176.pdf_