IMF Executive Board Concludes Second Review Under Armenia’s Stand-By Arrangement and Augments Access to Address the Impact of COVID-19
IMF News, May 18, 2020
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- IMF Executive Board Concludes Second Review Under Armenia’s Stand-By Arrangement and Augments Access to Address the Impact of COVID-19
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- Authors: Arrangement, Augments Access
- Published: May 18, 2020
IMF decision and access augmentation
- The Executive Board 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 is SDR 180 million (about US$248 million), equivalent to 139.75 percent of Armenia’s quota in the IMF; it was approved on May 17, 2019.
- The authorities’ request to augment access under Armenia’s SBA was approved by 100 percent of quota (SDR 128.80 million or about US$175 million), bringing overall access under the SBA to SDR 308.8 million (around 240 percent of Armenia’s quota).
- The augmentation and completion of the review will make SDR 205.94 million (about US$280 million) immediately available.
- The augmentation is intended to help contain short-term risks and provide resources to meet the urgent human and economic implications of the COVID-19 pandemic.
Rationale: economic impact of COVID-19 and role of Fund support
- The COVID-19 pandemic and tightening global financial conditions have disrupted Armenia’s above-trend growth and favorable economic conditions.
- The near-term outlook has significantly weakened, with fiscal and current account deficits widening considerably in 2020.
- The Fund’s financial support aims to help Armenia meet these challenges, including urgent social and economic implications of the pandemic.
Assessment of policy response and recommendations (Mr. Tao Zhang, Deputy Managing Director and Chair)
- Observations on 2019–2020 performance and policy response:
- Following a strong performance in 2019, the Armenian economy was hit hard by the COVID-19 pandemic.
- The government adopted widespread containment measures while supporting vulnerable individuals and firms in the most affected sectors.
- Fiscal policy:
- The fiscal deficit is projected to widen considerably in 2020, reflecting the impact 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.
- Monetary and financial policy:
- The Central Bank of Armenia balanced mandates for price and financial stability: it lowered its policy rate, ensured ample market liquidity, and intervened to limit excessive exchange rate volatility.
- Structural reforms and growth:
- Implementation of the authorities’ reform agenda will bolster sustainable and inclusive growth, including:
- Establishing a holistic anti-corruption framework.
- Improving the business climate and supporting small and medium-sized enterprises.
- Strengthening the health and education sectors.
- Role of the SBA augmentation:
- 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.
Key economic projections and selected indicators (Armenia: Selected Economic and Financial Indicators, 2017–25)
- National income and prices
- Real GDP (percent change): 2017: 7.5; 2018: 5.2; 2019: 7.6; 2020: -1.5; 2021: 4.8; 2022: 4.5
- Final consumption expenditure, Contrib. to Growth: 2017: 7.4; 2018: 4.1; 2019: 8.8; 2020: 1.2; 2021: 1.5; 2022: 1.8; 2023: 1.9
- Gross fixed capital formation, Contrib. to Growth: 2017: 0.7; 2018: 0.8; 2019: 0.0; 2020: 2.3; 2021: 2.4; 2022: 2.5; 2023: 2.6
- Changes in inventories, Contrib. to Growth: 2017: 1.1; 2018: 3.8; 2019: -1.7; 2020: -2.5
- Net exports of goods and services, Contrib. to Growth: 2017: -1.2; 2018: -2.7; 2019: 0.1; 2020: -0.2; 2021: 1.0; 2022: 0.3
- Gross domestic product (in billions of drams): 2017: 5,564; 2018: 6.017; 2019: 6.569; 2020: 6,519; 2021: 6,990; 2022: 7,543; 2023: 8,181; 2024: 8,909; 2025: 9,721
- Gross domestic product (in millions of USD): 2017: 11,527; 2018: 12.457; 2019: 13.672; 2020: 12,977; 2021: 13,422; 2022: 14,536; 2023: 15,597; 2024: 16,768; 2025: 18,041
- Gross domestic product per capita (in USD): 2017: 3,869; 2018: 4.196; 2019: 4.615; 2020: 4,370; 2021: 4,520; 2022: 4,894; 2023: 5,251; 2024: 5,645; 2025: 6,073
- CPI (period average; percent change): 2017: 1.4; 2018: 0.9; 2019: 2.0; 2020: 3.0; 2021: 3.5; 2022: 3.9
- CPI (end of period; percent change): 2017: 4.0
- GDP deflator (percent change): 2017: 2.1; 2018: 2.8; 2019: 3.3; 2020: 4.2; 2021: 4.4
- Unemployment rate (in percent): 2017: 20.9; 2018: 20.5; 2019: 18.9; 2020: 19.0; 2021: 17.9; 2022: 17.6; 2023: 17.5; 2024: 17.4; 2025: 17.3
- Investment and saving (in percent of GDP)
- Investment: 2017: 19.3; 2018: 22.4; 2019: 21.4; 2020: 21.9; 2021: 23.0; 2022: 23.5; 2023: 24.1
- National savings: 2017: 16.3; 2018: 13.0; 2019: 11.0; 2020: 12.8; 2021: 14.7; 2022: 15.7; 2023: 16.6; 2024: 18.1
- Money and credit (end of period) (percent change)
- Reserve money: 2017: -1.0; 2018: 17.8; 2019: 5.4; 2020: 13.2; 2021: 11.1; 2022: 10.8; 2023: 8.0; 2024: 8.2
- Broad money: 2017: 18.5; 2018: 11.2
- Private sector credit growth: 2017: 16.5; 2018: 17.2; 2019: 7.0; 2020: 9.0; 2021: 8.5
- Central government operations (in percent of GDP; unless otherwise indicated)
- Revenue and grants: 2017: 21.2; 2018: 22.3; 2019: 23.9; 2020: 23.3; 2021: 23.7; 2022: 24.9; 2023: 25.3; 2024: 25.4
- Of which : tax revenue: 2017: 20.2; 2018: 21.0; 2019: 21.7; 2020: 22.0; 2021: 22.9; 2022: 23.1; 2023: 23.2
- Expenditure: 2017: 26.0; 2018: 28.3; 2019: 26.5; 2020: 26.9
- Overall balance on a cash basis: 2017: -4.8; 2018: -1.8; 2019: -5.0; 2020: -2.9; 2021: -2.0
- Public and publicly guaranteed (PPG) debt
- PPG debt (percent of GDP): 2017: 58.9; 2018: 55.8; 2019: 53.6; 2020: 64.1; 2021: 62.1; 2022: 59.8; 2023: 57.0; 2024: 54.8; 2025: 52.8
- Central Government's PPG debt (in percent): 2017: 53.7; 2018: 51.3; 2019: 50.0; 2020: 60.9; 2021: 59.1; 2022: 57.3; 2023: 55.0; 2024: 53.3; 2025: 51.8
- Share of foreign currency debt (in percent): 2017: 81.1; 2018: 80.0; 2019: 79.0; 2020: 75.7; 2021: 73.5; 2022: 74.1; 2023: 75.1; 2024: 74.3; 2025: 73.7
- External sector (in millions of USD; unless otherwise indicated)
- Exports of goods and services: 2017: 4,312; 2018: 4,700; 2019: 5,274; 2020: 4,091; 2021: 4,817; 2022: 5,344; 2023: 5,765; 2024: 6,150; 2025: 6,557
- Imports of goods and services: 2017: -5,723; 2018: -6,647; 2019: -7,246; 2020: -5,946; 2021: -6,606; 2022: -7,289; 2023: -7,815; 2024: -8,307; 2025: -8,830
- Exports of goods and services (percent change): 2017: 12.2; 2018: -22.4; 2019: 17.7; 2020: 10.9; 2021: 7.9; 2022: 6.7; 2023: 6.6
- Imports of goods and services (percent change): 2017: 26.7; 2018: 16.1; 2019: -17.9; 2020: 10.3; 2021: 7.2; 2022: 6.3
- Current account balance (in percent of GDP): 2017: -3.0; 2018: -9.4; 2019: -8.2; 2020: -8.6; 2021: -7.2; 2022: -6.7; 2023: -6.4; 2024: -6.1; 2025: -6.0
- FDI (net): 2017: 222; 2018: 247; 2019: 397; 2020: 161; 2021: 292; 2022: 385; 2023: 404; 2024: 439; 2025: 461
- Gross international reserves: 2017: 2,314; 2018: 2,259; 2019: 2,850; 2020: 2,190; 2021: 2,245; 2022: 2,446; 2023: 2,578; 2024: 2,587; 2025: 2,598
- Import cover 1/: 2017: 3.7; 2018: 5.7
- End-of-period exchange rate (dram per USD): 2017: 484; 2018: 480
- Average exchange rate (dram per USD): 2017: 483
Press Release No. 20/219 – IMF Communications Department, May 18, 2020.
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