{
  "title": "IMF Executive Board Concludes 2021 Article IV Consultation and Completes the Fourth and Fifth Reviews under the Stand-By Arrangement for the Republic of Armenia",
  "publication": "IMF News, December 17, 2021",
  "sourceUrl": "https://www.imf.org/en/news/articles/2021/12/17/pr21385-imf-executive-board-concludes-2021-article-iv-consultation-armenia",
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  "summary": "The Executive Board concluded the 2021 Article IV consultation and completed the fourth and fifth reviews of Armenia’s program supported by the Stand-By Arrangement (SBA).",
  "publishDate": "2021-12-17",
  "sections": [
    {
      "heading": "Executive Board decision and IMF financing",
      "content": "- The Executive Board concluded the 2021 Article IV consultation and completed the fourth and fifth reviews of Armenia’s program supported by the Stand-By Arrangement (SBA).\n- Completion of these reviews allows the authorities to draw SDR 51.43 million (about US$ 72 million).\n- Total disbursements following this draw will be SDR 283.09 million (about US$ 396 million).\n- Armenia’s three-year SBA is SDR 308.8 million (about US$ 432 million), equivalent to 239.75 percent of Armenia’s quota; it was approved on May 17, 2019 and augmented on May 18, 2020.\n- The Executive Board granted a waiver of nonobservance for the end-June 2021 quantitative performance criterion on net international reserves based on corrective actions taken by the authorities."
    },
    {
      "heading": "Recent economic performance and outlook",
      "content": "- Real GDP contracted by 7.4 percent in 2020.\n- GDP growth is projected at:\n  - around 5½ percent in 2021,\n  - 5.3 percent in 2022 (Table shows 5.3 percent under \"Proj.\"),\n  - medium-term growth projected around 4½ - 5 percent, contingent on COVID-19 developments, external demand, and progress on structural reforms implementation.\n- The economy has rebounded in 2021 following timely and targeted health, fiscal, and financial support measures.\n- Inflation developments:\n  - CPI (period average; percent change): 6.6 in 2020; 5.1 in 2021; 4.5 in 2022; 4.2 in 2023; 4.1 in 2024.\n  - CPI (end of period; percent change): 8.5 in 2020; 4.0 in 2021.\n  - GDP deflator (percent change): 7.8 in 2021; 6.3 in 2022; 3.6 in 2023.\n- Unemployment rate (in percent): 18.1 in 2020; 18.5 in 2021; projected 17.8 in 2022; 17.5 in 2023; 17.3 in 2024; 17.0 in 2025."
    },
    {
      "heading": "Near-term policy priorities and recommended reforms",
      "content": "- Near-term priorities highlighted:\n  - Continued acceleration of vaccinations.\n  - Implementation of key reforms under the government’s 2021-26 program to sustainably raise inclusive growth by rebalancing the economy while preserving economic and financial stability.\n- Policy recommendations from Mr. Bo Li, Deputy Managing Director and Acting Chair:\n  - Strike an appropriate balance between withdrawal of targeted policy support and rebuilding medium-term buffers until the recovery is firmly entrenched.\n  - Develop an action plan to support robust and timely reform implementation with its costing well integrated into the medium-term expenditure framework.\n  - Commit to medium-term debt sustainability and rebuild medium-term fiscal buffers anchored on a credible medium-term fiscal framework and growth-friendly fiscal consolidation.\n  - Prioritize quality public investment while improving its execution.\n  - Continue careful monetary monitoring and stand ready to adjust stance to ensure inflation returns to its target; maintain exchange rate flexibility as an important policy buffer.\n  - Advance financial sector reforms to ensure the sector can support the recovery and longer-term growth, including macroprudential measures and enhancements to the CBA’s risk-based supervision framework.\n  - Implement the enhanced action plan for capital market development to expand the market’s role in financing domestic investment."
    },
    {
      "heading": "Fiscal stance and public debt",
      "content": "- Central government operations (in percent of GDP):\n  - Revenue and grants: 25.2 in 2020; 23.6 in 2021; 24.7 in 2022; 25.0 in 2023; 25.3 in 2024; 25.6 in 2025; tax revenue shown as 22.0 in 2020; 21.8 in 2021; 22.6 in 2022; 22.7 in 2023; 22.9 in 2024; 23.1 in 2025; 23.4 in 2026.\n  - Expenditure: 30.6 in 2020; 28.2 in 2021; 27.8 in 2022; 26.7 in 2023; 26.6 in 2024; 26.8 in 2025.\n  - Overall balance on a cash basis: -4.7 in 2020; -3.1 in 2021; -1.5 in 2022; -1.3 in 2023; -1.2 in 2024.\n- Public and publicly guaranteed (PPG) debt (in percent of GDP): 67.4 in 2020; 64.6 in 2021; 63.6 in 2022; 61.2 in 2023; 58.9 in 2024; 56.5 in 2025; 54.4 in 2026.\n- Central Government's PPG debt (in percent): 63.5 in 2020; 61.5 in 2021; 61.6 in 2022; 59.6 in 2023; 57.7 in 2024; 53.8 in 2025.\n- Share of foreign currency debt (in percent): 76.0 in 2020; 72.6 in 2021; 70.6 in 2022; 70.3 in 2023; 68.5 in 2024; 67.7 in 2025; 67.6 in 2026."
    },
    {
      "heading": "Monetary and financial sector developments",
      "content": "- Monetary policy was tightened against rising inflation; the tightening and improved policy communications have helped anchor inflation expectations.\n- Money and credit (end of period, percent change):\n  - Reserve money: 7.3 in 2020; 7.7 in 2021.\n  - Broad money: 9.0 in 2020; 16.3 in 2021; 9.8 in 2022; 14.3 in 2023; 9.7 in 2024; 8.1 in 2025; 8.0 in 2026.\n  - Private sector credit growth: 7.0 in 2019 (Table shows 17.2 in 2018; 7.0 in 2019; no 2020 number listed).\n- Financial sector recommendations:\n  - Continue macroprudential measures to strengthen the supervisory toolkit.\n  - Enhance the CBA’s risk-based supervision framework.\n  - Strengthen capital market development to expand market financing for domestic investment."
    },
    {
      "heading": "External sector and external buffers",
      "content": "- Exports of goods and services (in millions of USD): 3,763 in 2020; 4,559 in 2021; 5,295 in 2022; 5,816 in 2023; 6,381 in 2024; 6,807 in 2025; 7,262 in 2026.\n- Imports of goods and services (in millions of USD): -5,019 in 2020; -5,730 in 2021; -6,672 in 2022; -7,459 in 2023; -8,197 in 2024; -8,735 in 2025; -9,303 in 2026.\n- Exports percent change: -34.2 in 2020; 21.2 in 2021; 16.1 in 2022; 6.7 in 2023.\n- Imports percent change: -33.2 in 2020; 14.2 in 2021; 16.4 in 2022; 11.8 in 2023; 9.9 in 2024; 6.5 in 2025.\n- Current account balance (in percent of GDP): -2.1 in 2020; -3.5 in 2021; -4.8 in 2022; -5.6 in 2023; -5.7 in 2024.\n- FDI (net, in millions of U.S. dollars): 74 in 2020; 223 in 2021; 259 in 2022; 337 in 2023; 421 in 2024; 467 in 2025; 481 in 2026.\n- Gross international reserves (in millions of U.S. dollars): 2,616 in 2020; 3,101 in 2021; 3,207 in 2022; 3,320 in 2023; 3,377 in 2024; 3,394 in 2025; 3,402 in 2026.\n- Import cover (months of next year's imports): 4.9 in 2020; 4.6 in 2021 (Table shows earlier years: 6.8 in 2018; 5.6 in 2019).\n- End-of-period exchange rate (dram per U.S. dollar): 523 in 2020; earlier years 484 in 2018; 480 in 2019. Average exchange rate (dram per U.S. dollar): 483 in 2018; 489 in 2019."
    },
    {
      "heading": "Key socio-economic and national income indicators (selected)",
      "content": "- Gross domestic product (in millions of U.S. dollars): 12,641 in 2020; 13,888 in 2021; 15,729 in 2022; 16,671 in 2023; 17,823 in 2024; 19,217 in 2025; 20,732 in 2026.\n- Gross domestic product per capita (in U.S. dollars): 4,267 in 2020; 4,688 in 2021; 5,309 in 2022; 5,627 in 2023; 6,015 in 2024; 6,485 in 2025; 6,995 in 2026.\n- Contributions to growth (selected):\n  - Final consumption expenditure, Contrib. to Growth: -9.7 in 2020; 4.4 in 2021; 3.8 in 2022; 2.7 in 2023; 2.3 in 2024; 2.2 in 2025.\n  - Gross fixed capital formation, Contrib. to Growth: -1.4 in 2020; 1.3 in 2021; 1.4 in 2022; 1.9 in 2023; 2.1 in 2024; 2.5 in 2025; 2.6 in 2026.\n  - Net exports of goods and services, Contrib. to Growth: 3.4 in 2020; 0.5 in 2021; -0.5 in 2022; -0.7 in 2023; -0.1 in 2024.\n\nIMF Executive Board press release, December 17, 2021.\n\n---\n\n Content in this bundle\n\n- Press Release-English\n  - Press Release-English (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Press Release-English (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Republic of Armenia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Special Drawing Rights (SDRs) -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- Press Release No. 19/173\n- Press Release No. 20/219\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/12/17/pr21385-imf-executive-board-concludes-2021-article-iv-consultation-armenia"
    }
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    "Published: December 17, 2021",
    "The Executive Board concluded the 2021 Article IV consultation and completed the fourth and fifth reviews of Armenia’s program supported by the Stand-By Arrangement (SBA).",
    "Completion of these reviews allows the authorities to draw SDR 51.43 million (about US$ 72 million).",
    "Total disbursements following this draw will be SDR 283.09 million (about US$ 396 million).",
    "Armenia’s three-year SBA is SDR 308.8 million (about US$ 432 million), equivalent to 239.75 percent of Armenia’s quota; it was approved on May 17, 2019 and augmented on May 18, 2020.",
    "The Executive Board granted a waiver of nonobservance for the end-June 2021 quantitative performance criterion on net international reserves based on corrective actions taken by the authorities.",
    "Real GDP contracted by 7.4 percent in 2020.",
    "GDP growth is projected at:",
    "The economy has rebounded in 2021 following timely and targeted health, fiscal, and financial support measures.",
    "Inflation developments:",
    "Unemployment rate (in percent): 18.1 in 2020; 18.5 in 2021; projected 17.8 in 2022; 17.5 in 2023; 17.3 in 2024; 17.0 in 2025.",
    "Near-term priorities highlighted:",
    "Policy recommendations from Mr. Bo Li, Deputy Managing Director and Acting Chair:",
    "Central government operations (in percent of GDP):",
    "Public and publicly guaranteed (PPG) debt (in percent of GDP): 67.4 in 2020; 64.6 in 2021; 63.6 in 2022; 61.2 in 2023; 58.9 in 2024; 56.5 in 2025; 54.4 in 2026.",
    "Central Government's PPG debt (in percent): 63.5 in 2020; 61.5 in 2021; 61.6 in 2022; 59.6 in 2023; 57.7 in 2024; 53.8 in 2025.",
    "Share of foreign currency debt (in percent): 76.0 in 2020; 72.6 in 2021; 70.6 in 2022; 70.3 in 2023; 68.5 in 2024; 67.7 in 2025; 67.6 in 2026.",
    "Monetary policy was tightened against rising inflation; the tightening and improved policy communications have helped anchor inflation expectations.",
    "Money and credit (end of period, percent change):",
    "Financial sector recommendations:",
    "Exports of goods and services (in millions of USD): 3,763 in 2020; 4,559 in 2021; 5,295 in 2022; 5,816 in 2023; 6,381 in 2024; 6,807 in 2025; 7,262 in 2026.",
    "Imports of goods and services (in millions of USD): -5,019 in 2020; -5,730 in 2021; -6,672 in 2022; -7,459 in 2023; -8,197 in 2024; -8,735 in 2025; -9,303 in 2026.",
    "Exports percent change: -34.2 in 2020; 21.2 in 2021; 16.1 in 2022; 6.7 in 2023.",
    "Imports percent change: -33.2 in 2020; 14.2 in 2021; 16.4 in 2022; 11.8 in 2023; 9.9 in 2024; 6.5 in 2025.",
    "Current account balance (in percent of GDP): -2.1 in 2020; -3.5 in 2021; -4.8 in 2022; -5.6 in 2023; -5.7 in 2024.",
    "FDI (net, in millions of U.S. dollars): 74 in 2020; 223 in 2021; 259 in 2022; 337 in 2023; 421 in 2024; 467 in 2025; 481 in 2026.",
    "Gross international reserves (in millions of U.S. dollars): 2,616 in 2020; 3,101 in 2021; 3,207 in 2022; 3,320 in 2023; 3,377 in 2024; 3,394 in 2025; 3,402 in 2026.",
    "Import cover (months of next year's imports): 4.9 in 2020; 4.6 in 2021 (Table shows earlier years: 6.8 in 2018; 5.6 in 2019).",
    "End-of-period exchange rate (dram per U.S. dollar): 523 in 2020; earlier years 484 in 2018; 480 in 2019. Average exchange rate (dram per U.S. dollar): 483 in 2018; 489 in 2019.",
    "Gross domestic product (in millions of U.S. dollars): 12,641 in 2020; 13,888 in 2021; 15,729 in 2022; 16,671 in 2023; 17,823 in 2024; 19,217 in 2025; 20,732 in 2026.",
    "Gross domestic product per capita (in U.S. dollars): 4,267 in 2020; 4,688 in 2021; 5,309 in 2022; 5,627 in 2023; 6,015 in 2024; 6,485 in 2025; 6,995 in 2026.",
    "Contributions to growth (selected):",
    "**Press Release-English**",
    "[Republic of Armenia and the IMF](http://www.imf.org/external/country/ARM/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
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    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Press Release No. 19/173](https://www.imf.org/en/News/Articles/2019/05/17/pr19173-armenia-imf-executive-board-approves-stand-by-arrangement)",
    "[Press Release No. 20/219](https://www.imf.org/en/News/Articles/2020/05/18/pr20219-armenia-imf-execboard-concludes-2ndrev-under-sba-augments-access-address-impact-covid19)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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