YEREVAN, OCTOBER 17, ARMENPRESS: The International Monetary Fund, in the framework of the program Extended Fund Facility (EFF), will allocate to Armenia SDR (Special Drawing Right) 23,48 million with two tranches. Armenpress reports that the statement of the Head of the Armenian Mission of the International Monetary Fund Mark Horton says about it.  

The IMF’s first tranche of $17 million was allocated in March 2014 and during the first half of the year all the planned programs have been implemented. The second tranche of $17 million is intended to be allocated in December 2014.

“The IMF Board is tentatively scheduled to consider the review by the end of the year. Upon approval, the IMF will disburse SDR 11.74 million, bringing total disbursements under the EFF to SDR 23.48 million”, - said Mark Horton, Armenpress reports.

Mark Horton added: “Armenia’s economic performance has slowed in 2014 in the context of Russia’s downturn and sluggish growth in Europe. Exports, remittances, and domestic demand are weaker, and growth is expected to decelerate to 2.6 percent this year from 3.5 percent in 2013. The external current account will widen somewhat and inflation will remain below the Central Bank of Armenia’s (CBA) target range (4 ± 1.5 percent). Policies in 2015 aim to support a pick-up of growth to 3.3 percent, but there are downside risks from a further slowdown in Russia and Europe. Over the medium term, decisive implementation of structural reforms and an improvement in the regional outlook will support higher growth.

The Fund-supported program is broadly on track. The June fiscal balance target was met by a large margin, reflecting under-execution of capital projects. The CBA met the June target for holdings of foreign exchange reserves. Structural reforms are advancing, although overall progress was mixed. Progress was registered in financial sector reforms, the adoption of an “open skies” framework for civil aviation, which is delivering increased flights at lower costs, and in preparatory work for overhauling bankruptcy processes. Delays in competition and regulatory reforms reflected the government transition this May.      

The mission reached preliminary agreement on a policy framework for the rest of 2014 and 2015 that could form the basis for completion of the First Review. This includes a moderate expansion of the budget deficit in 2015 to support demand. Fiscal measures will also include efforts to strengthen capital spending execution, improve tax administration, and mitigate fiscal risks. The CBA will continue its commitment to a flexible exchange rate and inflation-targeting regime. Other reforms aim to enhance the financial sector, the business climate and competition, implement the new pension law, and ensure sustainability and greater efficiency in the energy sector”.