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 p...
