{
  "title": "IMF Executive Board Completes the First Review Under the Stand-By Arrangement with Armenia",
  "publication": "IMF News, June 12, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/06/12/pr23205-armenia-imf-exec-board-completes-1st-rev-under-stand-by-arrangement",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the first review under the Stand-By Arrangement (SBA) with Armenia. The completion of the review enables access of SDR 18.4 million (about US$24.5 million), bringing total access to SDR 36.8 million (about US$49 million).",
  "publishDate": "2023-06-12",
  "sections": [
    {
      "heading": "Review outcome and financing",
      "content": "- The Executive Board completed the first review under the Stand-By Arrangement (SBA) with Armenia.\n- The completion enables access of SDR 18.4 million (about US$24.5 million), bringing total access to SDR 36.8 million (about US$49 million).\n- The SBA was approved by the IMF’s Board on December 12, 2022.\n- The Armenian authorities continue to treat the arrangement as precautionary.\n- The Executive Board’s decision on the first review was taken without a meeting."
    },
    {
      "heading": "Recent macroeconomic developments (2022–2023Q1)",
      "content": "- Real GDP growth in 2022: 12.6 percent, driven by robust consumption and external demand, and fueled by large foreign exchange and migrant inflows from Russia.\n- Growth momentum continued in 2023Q1, led by expansion in construction, service, and trade-related sectors.\n- Current account deficit for the year 2022: 0.9 percent of GDP.\n- Gross reserves increased to US$4.1 bn.\n- Dram appreciation: over 20 percent against the US dollar in 2022."
    },
    {
      "heading": "Inflation and labor market",
      "content": "- Headline inflation (y-o-y) in April 2023: 3.2 percent.\n- Core inflation (y-o-y) in April 2023: 4.3 percent.\n- Double-digit nominal wage growth and service price growth are noted as sources of significant underlying inflationary pressures.\n- Unemployment rate (2022): 13.0 percent; projected 2023: 13.5 percent, 2024: 14.0 percent."
    },
    {
      "heading": "Fiscal and public debt developments",
      "content": "- Headline fiscal deficit narrowed to 2.1 percent of GDP in 2022 due to robust revenues and spending under-execution.\n- Central government debt dropped by 14 percentage points of GDP to 46.7 percent of GDP in 2022.\n- Central government operations (selected):\n  - Revenue and grants (2022): 24.3 percent of GDP; projected 2023: 24.5 percent; 2024: 24.8 percent.\n  - Of which: tax revenue (2022): 21.9 percent of GDP; projected 2023: 22.7 percent.\n  - Expenditure (2022): 26.4 percent of GDP; projected 2023: 27.4 percent.\n  - Overall balance on a cash basis (2022): -2.1 percent of GDP; projected 2023: -2.9 percent; 2024: -2.7 percent.\n- Public and publicly-guaranteed (PPG) debt (in percent of GDP): 2022: 49.3; 2023: 49.6; 2024: 50.1."
    },
    {
      "heading": "Program implementation and structural measures",
      "content": "- The program is broadly on track.\n- All end-December quantitative performance criteria (QPCs) and indicative targets (IT) were met.\n- Good progress toward completion of structural benchmarks (SB).\n- The end-March structural benchmark requiring the adoption of a decree clarifying the mandate, reporting, transparency, and viability requirements for the Armenian National Interests Fund (ANIF) was completed as a prior action for the review."
    },
    {
      "heading": "Outlook and risks",
      "content": "- GDP growth projected for 2023: 5.5 percent; 2024: 5.0 percent; 2025: 4.5 percent.\n- With services trade and remittances normalizing, the current account deficit is expected to widen in 2023.\n- Inflation is expected to stabilize at the Central Bank of Armenia’s target of 4 percent within a year.\n- Elevated risks include a challenging external environment, regional tensions, tighter global financial conditions, and a slowdown in major trading partners."
    },
    {
      "heading": "Policy recommendations and priorities",
      "content": "- Fiscal policy:\n  - If growth and revenues are stronger than projected, building fiscal buffers is a priority.\n  - Continue revenue mobilization efforts, including broadening the tax base and tackling informality.\n- Monetary and financial sector policy:\n  - Maintain decisive and pro-active, data-dependent monetary policy to remain vigilant against inflationary pressures.\n  - Closely monitor financial sector risks related to the real estate sector by strengthening supervisory tools.\n- Structural reforms to unlock long-term growth potential:\n  - Boost trade links and diversification.\n  - Enhance access to finance.\n  - Complete governance reforms.\n  - Improve climate change resilience."
    },
    {
      "heading": "Key statistics (selected from Table 1)",
      "content": "- Real GDP (percent change): 2020: -7.2; 2021: 5.7; 2022: 12.6; 2023: 5.5; 2024: 5.0; 2025: 4.5.\n- Gross domestic product (in billions of drams): 2020: 6,182; 2021: 6,983; 2022: 8,497; 2023: 9,528; 2024: 10,451; 2025: 11,358.\n- Gross domestic product (in millions of U.S. dollars): 2020: 12,642; 2021: 13,861; 2022: 19,503; 2023: 23,873; 2024: 25,121; 2025: 26,251.\n- Gross domestic product per capita (in U.S. dollars): 2020: 4,269; 2021: 4,679; 2022: 6,584; 2023: 8,058.\n- CPI (period average; percent change): 2020: 1.2; 2021: 7.2; 2022: 8.6; 2023: 5.6.\n- CPI (end of period; percent change): 2020: 3.7; 2021: 7.7; 2022: 8.3.\n- Investment (in percent of GDP): 2020: 19.7; 2021: 20.7; 2022: 19.4; 2023: 23.2.\n- National savings (in percent of GDP): 2020: 15.9; 2021: 17.0; 2022: 18.5; 2023: 21.7.\n- Broad money (percent change, end of period): 2020: 9.0; 2021: 13.1; 2022: 16.1; 2023: 11.6.\n- Private sector credit growth (percent change, end of period): 2020: 14.3; 2021: -3.9; 2022: 8.0; 2023: 6.8.\n- Exports of goods and services (in millions of U.S. dollars): 2020: 3,818; 2021: 5,012; 2022: 9,698; 2023: 11,407.\n- Imports of goods and services (in millions of U.S. dollars): 2020: -5,082; 2021: -6,120; 2022: -10,118; 2023: -12,273.\n- Current account balance (in percent of GDP): 2020: -3.8; 2021: -3.7; 2022: -1.6; 2023: -3.0.\n- FDI (net, in millions of U.S. dollars): 2020: 86; 2021: 342; 2022: 948; 2023: 410.\n- Gross international reserves (in millions of U.S. dollars): 2020: 2,616; 2021: 3,230; 2022: 4,103; 2023: 4,248.\n- End-of-period exchange rate (dram per U.S. dollar): 2020: 523; 2021: 480; 2022: 394.\n\nIMF Communications Department. Press Release No. 23/205, June 12, 2023.\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- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Republic of Armenia and the IMF\n- Russian Federation and the IMF\n- Press Releases\n- PRESS CENTER\n- Stand-By Arrangement\n- Press Release No. 22/429\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/06/12/pr23205-armenia-imf-exec-board-completes-1st-rev-under-stand-by-arrangement"
    }
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    "Published: June 12, 2023",
    "The Executive Board completed the first review under the Stand-By Arrangement (SBA) with Armenia.",
    "The completion enables access of SDR 18.4 million (about US$24.5 million), bringing total access to SDR 36.8 million (about US$49 million).",
    "The SBA was approved by the IMF’s Board on December 12, 2022.",
    "The Armenian authorities continue to treat the arrangement as precautionary.",
    "The Executive Board’s decision on the first review was taken without a meeting.",
    "Real GDP growth in 2022: 12.6 percent, driven by robust consumption and external demand, and fueled by large foreign exchange and migrant inflows from Russia.",
    "Growth momentum continued in 2023Q1, led by expansion in construction, service, and trade-related sectors.",
    "Current account deficit for the year 2022: 0.9 percent of GDP.",
    "Gross reserves increased to US$4.1 bn.",
    "Dram appreciation: over 20 percent against the US dollar in 2022.",
    "Headline inflation (y-o-y) in April 2023: 3.2 percent.",
    "Core inflation (y-o-y) in April 2023: 4.3 percent.",
    "Double-digit nominal wage growth and service price growth are noted as sources of significant underlying inflationary pressures.",
    "Unemployment rate (2022): 13.0 percent; projected 2023: 13.5 percent, 2024: 14.0 percent.",
    "Headline fiscal deficit narrowed to 2.1 percent of GDP in 2022 due to robust revenues and spending under-execution.",
    "Central government debt dropped by 14 percentage points of GDP to 46.7 percent of GDP in 2022.",
    "Central government operations (selected):",
    "Public and publicly-guaranteed (PPG) debt (in percent of GDP): 2022: 49.3; 2023: 49.6; 2024: 50.1.",
    "The program is broadly on track.",
    "All end-December quantitative performance criteria (QPCs) and indicative targets (IT) were met.",
    "Good progress toward completion of structural benchmarks (SB).",
    "The end-March structural benchmark requiring the adoption of a decree clarifying the mandate, reporting, transparency, and viability requirements for the Armenian National Interests Fund (ANIF) was completed as a prior action for the review.",
    "GDP growth projected for 2023: 5.5 percent; 2024: 5.0 percent; 2025: 4.5 percent.",
    "With services trade and remittances normalizing, the current account deficit is expected to widen in 2023.",
    "Inflation is expected to stabilize at the Central Bank of Armenia’s target of 4 percent within a year.",
    "Elevated risks include a challenging external environment, regional tensions, tighter global financial conditions, and a slowdown in major trading partners.",
    "Fiscal policy:",
    "Monetary and financial sector policy:",
    "Structural reforms to unlock long-term growth potential:",
    "Real GDP (percent change): 2020: -7.2; 2021: 5.7; 2022: 12.6; 2023: 5.5; 2024: 5.0; 2025: 4.5.",
    "Gross domestic product (in billions of drams): 2020: 6,182; 2021: 6,983; 2022: 8,497; 2023: 9,528; 2024: 10,451; 2025: 11,358.",
    "Gross domestic product (in millions of U.S. dollars): 2020: 12,642; 2021: 13,861; 2022: 19,503; 2023: 23,873; 2024: 25,121; 2025: 26,251.",
    "Gross domestic product per capita (in U.S. dollars): 2020: 4,269; 2021: 4,679; 2022: 6,584; 2023: 8,058.",
    "CPI (period average; percent change): 2020: 1.2; 2021: 7.2; 2022: 8.6; 2023: 5.6.",
    "CPI (end of period; percent change): 2020: 3.7; 2021: 7.7; 2022: 8.3.",
    "Investment (in percent of GDP): 2020: 19.7; 2021: 20.7; 2022: 19.4; 2023: 23.2.",
    "National savings (in percent of GDP): 2020: 15.9; 2021: 17.0; 2022: 18.5; 2023: 21.7.",
    "Broad money (percent change, end of period): 2020: 9.0; 2021: 13.1; 2022: 16.1; 2023: 11.6.",
    "Private sector credit growth (percent change, end of period): 2020: 14.3; 2021: -3.9; 2022: 8.0; 2023: 6.8.",
    "Exports of goods and services (in millions of U.S. dollars): 2020: 3,818; 2021: 5,012; 2022: 9,698; 2023: 11,407.",
    "Imports of goods and services (in millions of U.S. dollars): 2020: -5,082; 2021: -6,120; 2022: -10,118; 2023: -12,273.",
    "Current account balance (in percent of GDP): 2020: -3.8; 2021: -3.7; 2022: -1.6; 2023: -3.0.",
    "FDI (net, in millions of U.S. dollars): 2020: 86; 2021: 342; 2022: 948; 2023: 410.",
    "Gross international reserves (in millions of U.S. dollars): 2020: 2,616; 2021: 3,230; 2022: 4,103; 2023: 4,248.",
    "End-of-period exchange rate (dram per U.S. dollar): 2020: 523; 2021: 480; 2022: 394.",
    "**Press Release-English**",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Republic of Armenia and the IMF](http://www.imf.org/external/country/ARM/index.htm)",
    "[Russian Federation and the IMF](http://www.imf.org/external/country/RUS/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Stand-By Arrangement](https://www.imf.org/en/about/factsheets/sheets/2016/08/01/20/33/stand-by-arrangement)",
    "[Press Release No. 22/429](https://www.imf.org/en/News/Articles/2022/12/12/pr22429-imf-executive-board-approves-new-stand-by-arrangement-for-armenia)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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