Press Release No. 16/284
June 15, 2016
The Executive Board of the International Monetary Fund (IMF) completed today the third review of Armenia's performance under a three-year arrangement under the Extended Fund Facility (EFF). The completion enables the release of SDR 15.65 million (about US$22.01 million), bringing total disbursements under the arrangement to SDR 50.87 million (about US$71.53 million). The extended arrangement for SDR 82.21 million (about US$115.60 million) was approved on March 7, 2014 (see Press Release No. 14/88).
In completing the review, the Executive Board also approved the authorities’ request for waiver of non-observance of the end of December 2015 fiscal deficit performance criterion (PC), modification of the end-June 2016 fiscal deficit and budgetary domestic lending PCs, as well as shift from a net domestic assets (NDA) PC to monetary policy consultation clause (as of end-June 2016).
Following the Executive Board's discussion on Armenia, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, said:
“Despite difficult external conditions, program performance has been broadly satisfactory, with most targets met. The weak global and regional conditions have, through lower commodity prices and remittances, contributed to declining domestic demand. Moreover, bank credit growth and inflation have been negative. Nevertheless, real GDP growth has held up moderately, primarily due to export-related supply-side factors in mining and agriculture. Monetary conditions have stabilized and pressures in the FX market have diminished.
“The authorities remain committed to fiscal consolidation and debt sustainability, along with a greater focus on revenue gains to protect and increase capital and social spending. The new tax code (recently submitted to the national assembly) provides a major opportunity to broaden the tax base by reducing exemptions and addressing gaps and thereby supporting both consolidation and increases in growth-enhancing spending.
“The central bank’s actions have helped ensure orderly market conditions and financial stability. Going forward, exchange rate policy will continue to limit intervention and sustain buffers. Further normalization of the monetary conditions will help bring inflation closer to the target and support a resumption of bank lending, while the use of macro- and micro-prudential regulations and further strengthening of the crisis preparedness framework will help maintain orderly financial markets conditions.
“Pursuing further structural reforms to enhance competition, competitiveness, and regional and global integration remains critical to reduce vulnerabilities and support medium-term growth. Ensuring that the state budget does not absorb losses or liabilities or make payments on behalf of utilities or other companies will be needed to safeguard the prudent use of the limited budgetary resources.
“The outlook remains challenging, but the risks to the program are manageable. Steadfast implementation of the agreed set of measures going forward will keep the program on track, rebuild buffers and policy space, and accelerate achieving key reform agenda objectives.”
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Armenia: Selected Economic and Financial Indicators, 2013–17 |
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2013 |
2014 |
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2015 |
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2016 |
2017 |
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Act. |
Act. |
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CR No. |
Prel. |
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CR No. |
Proj. |
Proj. |
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15/320 1/ |
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15/320 1/ |
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National income and prices: |
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Real GDP (percent change) |
3.3 |
3.5 |
|
2.5 |
3.0 |
|
2.2 |
2.2 |
2.5 |
|
Gross domestic product (in billions of drams) |
4,556 |
4,843 |
|
5,122 |
5,047 |
|
5,443 |
5,297 |
5,646 |
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Gross domestic product (in millions of U.S. dollars) |
11,121 |
11,644 |
|
10,607 |
10,561 |
|
10,672 |
10,735 |
11,112 |
|
CPI (period average; percent change) |
5.8 |
3.0 |
|
4.3 |
3.7 |
|
3.4 |
-0.4 |
4.0 |
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CPI (end of period; percent change) |
5.6 |
4.6 |
|
3.4 |
-0.1 |
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4.0 |
1.0 |
4.0 |
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GDP deflator (percent change) 2/ |
3.4 |
2.7 |
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3.2 |
1.2 |
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4.0 |
2.7 |
4.0 |
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Investment and saving (in percent of GDP) |
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Investment |
22.3 |
21.1 |
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18.9 |
19.5 |
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19.5 |
19.6 |
20.0 |
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National savings |
14.7 |
13.8 |
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14.0 |
16.9 |
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13.7 |
16.6 |
16.6 |
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Money and credit (end of period) |
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Reserve money (percent change) |
29.9 |
-0.1 |
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4.9 |
3.9 |
|
4.8 |
5.8 |
6.7 |
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Broad money (percent change) |
15.2 |
8.9 |
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6.8 |
10.7 |
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6.3 |
5.5 |
6.7 |
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Central government operations (in percent of GDP) |
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Revenue and grants |
22.2 |
22.0 |
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21.5 |
21.5 |
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21.2 |
21.5 |
21.6 |
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Of which: tax revenue |
21.0 |
21.0 |
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20.1 |
20.0 |
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20.0 |
20.0 |
20.5 |
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Expenditure |
23.8 |
23.9 |
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25.4 |
26.3 |
|
24.7 |
25.6 |
24.4 |
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Overall balance on a cash basis |
-1.0 |
-2.1 |
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-3.9 |
-4.8 |
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-3.5 |
-4.1 |
-2.8 |
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Public and publicly-guaranteed debt
(in percent of GDP) |
40.8 |
43.5 |
|
48.2 |
48.7 |
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50.6 |
52.4 |
54.0 |
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Share of foreign currency debt (in percent) |
85.2 |
86.2 |
|
88.5 |
86.9 |
|
87.7 |
87.0 |
86.2 |
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External sector |
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Exports of goods and services (in millions of
U.S. dollars) |
3,156 |
3,319 |
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3,226 |
3,140 |
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3,215 |
3,059 |
3,137 |
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Imports of goods and services (in millions of
U.S. dollars) |
-5,365 |
-5,468 |
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-4,634 |
-4,357 |
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-4,693 |
-4,041 |
-4,202 |
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Exports of goods and services (percent change) |
8.2 |
5.2 |
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-2.8 |
-5.4 |
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-0.3 |
-2.6 |
2.5 |
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Imports of goods and services (percent change) |
4.6 |
1.9 |
|
-15.3 |
-20.3 |
|
1.3 |
-7.3 |
4.0 |
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Current account balance (in percent of GDP) |
-7.6 |
-7.3 |
|
-4.9 |
-2.6 |
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-5.8 |
-3.0 |
-3.4 |
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Debt service ratio (in % of exp. of goods
and serv.) |
27.9 |
8.6 |
|
5.8 |
12.5 |
|
6.6 |
8.0 |
9.2 |
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Gross international reserves (in millions of U.S.
dollars) |
2,253 |
1,489 |
|
1,712 |
1,771 |
|
1,779 |
1,858 |
1,959 |
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Import cover (months of import) |
4.9 |
4.1 |
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4.4 |
5.3 |
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4.5 |
5.3 |
5.4 |
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End-of-period exchange rate (dram per
U.S. dollar) |
406 |
475 |
|
… |
484 |
|
… |
… |
… |
|
Average exchange rate (dram per U.S. dollar) |
410 |
416 |
|
… |
478 |
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… |
… |
… |
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Sources: Armenian authorities; and Fund staff estimates and projections.
1Staff Report for the Second Review |
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Armenia: Selected Economic and Financial Indicators, 2013–17 |
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2013 |
2014 |
|
2015 |
|
2016 |
2017 |
| |
Act. |
Act. |
|
CR No. |
Prel. |
|
CR No. |
Proj. |
Proj. |
| |
|
|
|
15/320 1/ |
|
|
15/320 1/ |
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|
|
|
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|
|
|
| |
|
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|
|
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|
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National income and prices: |
|
|
|
|
|
|
|
|
|
|
Real GDP (percent change) |
3.3 |
3.5 |
|
2.5 |
3.0 |
|
2.2 |
2.2 |
2.5 |
|
Gross domestic product (in billions of drams) |
4,556 |
4,843 |
|
5,122 |
5,047 |
|
5,443 |
5,297 |
5,646 |
|
Gross domestic product (in millions of U.S. dollars) |
11,121 |
11,644 |
|
10,607 |
10,561 |
|
10,672 |
10,735 |
11,112 |
|
CPI (period average; percent change) |
5.8 |
3.0 |
|
4.3 |
3.7 |
|
3.4 |
-0.4 |
4.0 |
|
CPI (end of period; percent change) |
5.6 |
4.6 |
|
3.4 |
-0.1 |
|
4.0 |
1.0 |
4.0 |
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GDP deflator (percent change) 2/ |
3.4 |
2.7 |
|
3.2 |
1.2 |
|
4.0 |
2.7 |
4.0 |
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|
Investment and saving (in percent of GDP) |
|
|
|
|
|
|
|
|
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Investment |
22.3 |
21.1 |
|
18.9 |
19.5 |
|
19.5 |
19.6 |
20.0 |
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National savings |
14.7 |
13.8 |
|
14.0 |
16.9 |
|
13.7 |
16.6 |
16.6 |
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Money and credit (end of period) |
|
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|
|
|
|
|
|
|
|
Reserve money (percent change) |
29.9 |
-0.1 |
|
4.9 |
3.9 |
|
4.8 |
5.8 |
6.7 |
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Broad money (percent change) |
15.2 |
8.9 |
|
6.8 |
10.7 |
|
6.3 |
5.5 |
6.7 |
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|
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Central government operations (in percent of GDP) |
|
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|
|
|
|
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Revenue and grants |
22.2 |
22.0 |
|
21.5 |
21.5 |
|
21.2 |
21.5 |
21.6 |
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Of which: tax revenue |
21.0 |
21.0 |
|
20.1 |
20.0 |
|
20.0 |
20.0 |
20.5 |
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Expenditure |
23.8 |
23.9 |
|
25.4 |
26.3 |
|
24.7 |
25.6 |
24.4 |
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Overall balance on a cash basis |
-1.0 |
-2.1 |
|
-3.9 |
-4.8 |
|
-3.5 |
-4.1 |
-2.8 |
|
Public and publicly-guaranteed debt
(in percent of GDP) |
40.8 |
43.5 |
|
48.2 |
48.7 |
|
50.6 |
52.4 |
54.0 |
|
Share of foreign currency debt (in percent) |
85.2 |
86.2 |
|
88.5 |
86.9 |
|
87.7 |
87.0 |
86.2 |
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External sector |
|
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|
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Exports of goods and services (in millions of
U.S. dollars) |
3,156 |
3,319 |
|
3,226 |
3,140 |
|
3,215 |
3,059 |
3,137 |
|
Imports of goods and services (in millions of
U.S. dollars) |
-5,365 |
-5,468 |
|
-4,634 |
-4,357 |
|
-4,693 |
-4,041 |
-4,202 |
|
Exports of goods and services (percent change) |
8.2 |
5.2 |
|
-2.8 |
-5.4 |
|
-0.3 |
-2.6 |
2.5 |
|
Imports of goods and services (percent change) |
4.6 |
1.9 |
|
-15.3 |
-20.3 |
|
1.3 |
-7.3 |
4.0 |
|
Current account balance (in percent of GDP) |
-7.6 |
-7.3 |
|
-4.9 |
-2.6 |
|
-5.8 |
-3.0 |
-3.4 |
|
Debt service ratio (in % of exp. of goods
and serv.) |
27.9 |
8.6 |
|
5.8 |
12.5 |
|
6.6 |
8.0 |
9.2 |
|
Gross international reserves (in millions of U.S.
dollars) |
2,253 |
1,489 |
|
1,712 |
1,771 |
|
1,779 |
1,858 |
1,959 |
|
Import cover (months of import) |
4.9 |
4.1 |
|
4.4 |
5.3 |
|
4.5 |
5.3 |
5.4 |
| |
|
|
|
|
|
|
|
|
|
|
End-of-period exchange rate (dram per
U.S. dollar) |
406 |
475 |
|
… |
484 |
|
… |
… |
… |
|
Average exchange rate (dram per U.S. dollar) |
410 |
416 |
|
… |
478 |
|
… |
… |
… |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
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Sources: Armenian authorities; and Fund staff estimates and projections.
1Staff Report for the Second Review |
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