By Emil Danielyan
The International Monetary Fund has released $26 million in additional loans to Armenia frozen last year over its government's poor tax collection, the IMF office in Yerevan officially announced on Wednesday.
The fund's Washington headquarters said in a statement that it is unblocking the second and third installments of its $91 million Poverty Reduction and Growth Facility (PRGF) credit because the Armenian authorities have achieved "some positive results" in addressing IMF concerns. It also praised the economic program of Prime Minister Andranik Markarian's cabinet for its emphasis on reform of governance, taxation and public utilities.
"The recent measures taken to improve the fiscal position and the performance of the energy sector, and the formulation of an ambitious official economic program for 2002-03 are especially welcome," the IMF's deputy managing director, Eduardo Aninat, was quoted as saying. "Strong performance under the program will be essential to address the key economic challenges facing Armenia and mobilize support for a successful poverty reduction strategy."
He also welcomed Armenia's relatively strong macroeconomic performance and continuing "sound monetary and exchange rate policies."
The Armenian government posted a 14 percent rise in tax revenues in the first half of this year and plans to boost them further by 13 percent next year. Finance and Economy Minister Vartan Khachatrian said last month that increased revenues will reduce the government's dependence on external budgetary borrowing and allow it to bring the budget deficit down to 2.6 percent of Gross Domestic Product in 2003.
Aninat said the authorities should also move quickly to strengthen the rule of law and eliminate substantial losses in the energy, water and irrigation sectors. "Measures to improve governance in a wide range of areas will also strengthen the business environment, encourage further private sector development, and support poverty reduction efforts," said the IMF deputy director.