By Emil Danielyan
The International Monetary Fund said on Wednesday that Armenia continues to meet most of its IMF-approved economic targets and is likely to be rewarded with more loans from the powerful Washington-based institution. The fund’s Yerevan office said in a statement that the Armenian authorities and a visiting IMF mission have “reached understandings” paving the way for the release of the fourth $13 million tranche of the IMF’s $91 million Poverty Reduction and Growth Facility (PRGF), a three-year loan program aimed at boosting the country’s macroeconomic stability.
“Understandings were reached on most policies for the next review, though further discussions on energy sector measures will be conducted this week,” the statement said. “The review could be considered by the Fund's Executive Board after final understandings are reached on those measures.”
The IMF gave no possible dates for the funds’ disbursement, saying only that Yerevan’s macroeconomic policies are largely in line with its recommendations. “The strong economic performance of the Armenian economy continued in 2002, with real GDP growing at 12.9 percent, the 12-month rate of inflation at 2 percent, a comfortable level of foreign exchange reserves, and a narrowing of the fiscal and current account deficits,” its statement said. “Other important achievements include the higher level of tax collection during the second half of 2002, the rapid clearance of domestic expenditure arrears, and the steady implementation of measures under the program.”
The PRGF program was launched in May 2001. Armenia has already obtained three PRGF installments totaling $46 million. The low-interest funds are channeled into the foreign exchange reserves of the Armenian Central Bank.
The IMF noted that the “understandings” on the next tranche primarily concern the Armenian government’s taxation methods, budgetary planning and its regulation of the banking sector. Armenia’s loss-making energy sector appears to remain its chief concern, with the IMF statement urging the authorities to “improve the transparency of the operations of state-owned companies in the energy sector, control their large debts, and improve their efficiency and accountability.”