Via IMF (Den Internationale Valutafond)

IMF Reaches Staff-Level Agreement on Second Review for Armenia’s Stand-By Arrangement, Request for Augmentation

April 9, 2020

End-of-Mission press releases include statements of IMF
staff teams that convey preliminary findings after a visit
to a country. The views expressed in this statement are
those of the IMF staff and do not necessarily represent the
views of the IMF’s Executive Board. Based on the
preliminary findings of this mission, staff will prepare a
report that, subject to management approval, will be
presented to the IMF’s Executive Board for discussion and

  • IMF team reaches a staff level agreement with the Armenian authorities for the completion of the second review of Armenia’s reform program, which is supported by the IMF. The authorities have requested an increase in financial support provided by the IMF for Armenia and, pending Executive Board approval, around $280 million will be available immediately after the Board meeting.
  • The COVID-19 pandemic, together with the recent oil price shock and the tightening of global financial conditions, will significantly change Armenia’s near-term economic outlook and prompt a deterioration of its external and fiscal accounts.
  • Higher access to IMF financing will help the authorities contain short-term risks and will provide resources to meet urgent medical an socio-economic needs during the peak of the virus outbreak.

Washington, DC –
An International Monetary Fund (IMF) team led by Nathan Porter conducted
discussions on the second review of Armenia’s reform program supported by
the IMF Stand-By Arrangement (SBA) during March 12-April 8, 2020. At the
conclusion of the mission, Mr. Porter issued the following statement:

“We are happy to announce that the IMF team reached a staff-level agreement
with the Armenian authorities on the conclusion of the second review under
their economic reform program supported by a three-year SBA. The agreement
is subject to approval by the IMF’s Executive Board, which is scheduled to
consider the review in mid-May. The staff will also recommend an increase
in IMF financial support for Armenia by SDR128.80 million (about US$175
million), which together with the authorities’ intention to draw purchase
rights accumulated under the SBA would make SDR 206 million (about US$280
million) available to be disbursed immediately after the Board meeting.
Such an increase is justified in the context of the urgent balance of
payments financing needs resulting from the consequences of the spread of
the COVID-19 virus. This financing will be allocated to the budget to help
the authorities’ efforts in meeting urgent medical and socio-economic needs
during the peak of the virus outbreak, thereby preserving the gains in
economic potential and inclusion that Armenia has achieved over recent

“As elsewhere, the current global crisis will significantly weaken
Armenia’s near-term economic outlook. Although projections are subject to
very high uncertainty, since the duration of the containment measures is
hard to predict, economic growth is expected at -1.5 percent in 2020 given
COVID-related restrictions on domestic mobility and activity, substantially
lower external demand, tighter financial conditions, and disruptions in
global trade and supply chains.

“The authorities are appropriately focused on measures to contain the
spread of COVID-19 and ensure that Armenia’s health system is ready to meet
the needs of the population. They have been working to equip the Ministry
of Health with additional resources and legislative powers to expeditiously
acquire necessary goods and equipment. Staff also welcomes the authorities’
economic policy response aimed at aiding businesses and vulnerable people
in order to avoid more permanent socio-economic damage. This response is
framed around a set of measures announced to be about 2 percent of GDP that
include liquidity provision to businesses, direct labor subsidies, and lump
sum transfers to vulnerable individuals. The authorities are committed to
ensure strong governance and transparency in implementation of these
programs. Staff encourages the authorities to continuously monitor the
implementation of these measures to ensure their effectiveness and
evenhanded coverage.

“The fiscal deficit in 2020 is expected to widen to about 5 percent of GDP,
due to lower revenues and higher spending on healthcare and economic
support. The emerging financing gap would be closed by mobilizing financing
from the IMF and other partners to complement that available from domestic
capital market. While the government debt is projected to exceed 60 percent
of GDP in 2020, as the crisis abates, the authorities are committed to the
medium-term fiscal goal of debt sustainability, which will see government
debt-to-GDP gradually decline over the medium term in line with Armenia’s
fiscal rule, while maintaining space for investment and social spending.

“The Central Bank of Armenia has moved quickly to respond to the COVID-19
crisis within its dual mandate of price and financial stability. It
promptly reduced the policy rate to boost inflation and support economic
activity, yet it stands ready to adjust policies in case of capital outflow
pressures and disorderly exchange rate movements to preserve financial
stability. Domestic financial markets have generally functioned smoothly
since the onset of the pandemic helped by CBA liquidity provision. The
CBA’s regulatory and supervisory responses have been appropriately
balancing the goals of preserving financial stability, maintaining banking
system soundness, and sustaining economic activity.

“Beyond the short term, staff welcomes the authorities’ intention to
continued economic reform aimed at lifting inclusive and resilient growth,
safeguarding social spending, bolstering financial sector resilience, and
enhancing business climate and governance.”

IMF Communications Department

PRESS OFFICER: Randa Elnagar

Phone: +1 202 623-7100Email:


READ ALSO  3.100 flere lønmodtagere i november