Economy 12:41 10/04/2020 Armenia

IMF forecasts for Armenia's economy amid coronavirus pandemic

The Armenian authorities have requested an increase in financial support provided by the International Monetary Fund (IMF) for the country and, pending Executive Board approval, around $280 million will be available immediately after the Board meeting, IMF said in a press release on Thursday.

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, IMF experts forecast.

Higher access to IMF financing will help the authorities contain short-term risks and will provide resources to meet urgent medical and socio-economic needs during the peak of the virus outbreak, the statement said.

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 a statement, which reads in part:

“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 years.

“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 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.”



Source Panorama.am
Share |

Related news

Տեքստում սխալ կամ վրիպակ նկատելու դեպքում, ուղարկեք խմբագրին հաղորդագրություն` նշելով տվյալ սխալը, այնուհետև սեղմելով Ctrl-Enter:

Newsfeed

12:48
Artsakh reports more coronavirus cases
Artsakh has reported 4 new cases of Covid-19 after receiving the test results of 56 samples sent to Armenia. The national coronavirus tally now...
12:30
Russia reports 8,338 new coronavirus cases
The daily number of recovered coronavirus patients in Russia on Wednesday again surpassed the number of new cases, TASS reported, citing the...
12:23
Viva-MTS: Recharge+ - use now, pay later
Viva-MTS informs that from now on, one can activate the Recharge+ service and continue using Viva-MTS services for up to AMD 1500 instead of AMD...
12:07
An incredible Armenian who retrieved Armenian orphans from the Syrian desert
By Harut Sassounian Publisher, The California Courier Parnag Shishigyan is a heroic Zeytountsi who retrieved hundreds of Armenian...
11:57
Coronavirus: Armenia reports 372 new cases on May 27
Armenia has confirmed 372 new coronavirus infections, bringing the total number of cases to 7,774 in the country as of 11 a.m. Wednesday, May...
11:40
Mikayel Minasyan: Media hysteria proves you are terrified of me
Armenia’s former Ambassador to the Vatican Mikayel Minasyan took to Facebook late on Tuesday to address the Armenian authorities and...
10:56
Irish PM accused of breaking social distancing rules after shirtless picnic
Ireland’s prime minister has been accused of breaking his own social distancing rules after being snapped topless while picnicking with...
10:47
ECHR decision in Safarov case a ruling against Azerbaijan's policy of Armenophobia – Foreign Ministry
The Foreign Ministry of Armenia on Tuesday issued a statement on the ECHR ruling in Makuchyan and Minasyan vs Azerbaijan and Hungary case. The...
10:06
Joaquín Caparrós: I would like to see more Armenian players in our teams
Armenian national football team head coach Joaquín Caparrós, who is not able to come to Armenia because of closed borders, is...
20:45
Health authorities in Armenia take note of WHO recommendation on coronavirus hydroxychloroquine trial
The Ministry of Health in Armenia discusses the recent decision by the World Health Organization (WHO) to temporarily suspend testing of the...
20:31
Pashinyan calls for tougher sanctions against those who neglect the preventive rules
Prime Minister Nikol Pashinyan chaired a session of the commission coordinating the activities for preventing the spread of COVID-19 in the...
20:20
Lavrov says Russia, Armenia enjoy close military cooperation
Armenian-Russian relations are characterized as allied and are allied in reality, Russian FM Sergey Lavrov told reporters on Tuesday after an...
19:57
PM says strict measures could be reintroduced to combat the pandemic
Public adherence to regulations and protective measures prescribed by the Commandant’s Office may improve the epidemiological situation in...
18:39
Russia to reduce gas price for Georgia by 15%
Georgia has revised the current contract with the Russian gas holding Gazprom and negotiated an approximately 15% imported gas price cut,...
18:26
Davit Babayan replaced by Vahram Poghosyan
Artsakh Republic President Arayik Harutyunyan signed a decree, according to which Vahram Poghosyan was appointed Head of Information...
18:07
Lavrov suggests CSTO member states to boost biosecurity cooperation 
Russia has offered the countries of the Collective Security Treaty Organization (CSTO), a post-Soviet security bloc, to consider priority...
17:44
ECHR ruling on Safarov case more significant for Armenia than the family of lieutenant Margaryan, lawyer says
The European Court of Human Rights (ECHR) ruling  on case of Makuchyan and Minasyan v. Azerbaijan and Hungary is extremely important...
16:21
New Artsakh police chief awards his predecessor
Artsakh President-elect Arayik Harutyunyan introduced on Tuesday new Chief of Police Ashot Hakobjanyan to the people. At a meeting with the...
15:40
Judge Anna Danibekyan will be among ‘those responsible for any health risks’, says Kocharyan's lawyer
"We are experiencing an extraordinary situation when we are recording a daily three-digit increase in the number of coronavirus cases....
15:20
Lufthansa agrees €9bn rescue deal with Germany
Lufthansa has agreed a rescue deal worth €9bn (£8bn) with the German government that saves it from collapse, BBC News reports....
15:07
Armenian PM congratulates Georgian counterpart on national holiday
Armenian Prime Minister Nikol Pashinyan has sent a congratulatory message to Georgian Prime Minister Giorgi Gakharia on Georgia’s national...
14:52
Kremlin spokesman Peskov discharged from hospital to gradually start working from home
Kremlin spokesman, Dmitry Peskov has told TASS that he was discharged from a hospital where he was receiving treatment after testing positive...
14:33
Court hearing in case of Kocharyan and others postponed for several reasons
The court hearing in the case of Armenia’s second President Robert Kocharyan and three other former top officials had to be postponed on...
14:02
Military helicopter crash-lands in Russia, kills 4 on board
A Russian military helicopter crash-landed on an airfield Tuesday in the far eastern region of Chukotka, killing four people, AP reported,...
13:54
ECHR rules violation of right to life, prohibition of discrimination by Azerbaijan in Gurgen Margaryan’s case
The European Court of Human Rights (ECHR) issued a judgement in the Case of Makuchyan and Minasyan v. Azerbaijan and Hungary. The court held...
12:58
Armenia marks Sardarapat Battle Victory Day
Armenia celebrates Sardarapat Battle Victory Day each year on May 26. The Battle of Sardarapat, which took place on May 21-28 1918, is one...
12:46
Austrian president apologizes for breaking Covid-19 curfew
Austria's President Alexander Van der Bellen has apologized after breaking the country's coronavirus curfew, CNN reports.  Van...
12:36
Armenian parliament kicks off regular session with face mask debates
The Armenian National Assembly started its four-day session on Tuesday with debates on the demand to wear face masks during the sittings....
11:47
Japan lifts state of emergency for entire country
Japan has lifted the state of emergency status for the entire country. The last areas to change their status were Hokkaido and Tokyo’s...
11:41
Coronavirus: Armenia reports 289 new cases on May 26
Armenia has confirmed 289 new coronavirus infections, bringing the total number of cases to 7,402 in the country as of 11 a.m. Tuesday, May 26,...

Follow us and get updates!

Most popular articles

{"core.blocks.header.spell_message1":"Selected mistake: ","core.blocks.header.spell_message2":"Send a message about the mistake?"}