By Emil Danielyan
Armenia is well placed to obtain yet another $14 million loan installment from the International Monetary Fund this spring, the IMF office in Yerevan indicated on Tuesday.
It said in a statement that a high-level IMF mission that was in the Armenian capital this month reached “preliminary understandings” with government officials on conditions for the release of the sixth tranche of the fund’s $100 million Poverty Reduction and Growth Facility (PRGF).
“If understandings on the pending issues are reached within the next few days, and if the program is approved by management, the Fund’s Executive Board could consider a request for a disbursement of the sixth tranche in late April or early May,” the statement said. It added that the decision is largely contingent on more government efforts to improve tax collection, reform the debt-ridden energy sector and develop financial services.
Armenia has already borrowed some $72 million under the PRGF that was designed to shore up the country’s hard currency reserves managed by the Armenian Central Bank. The three-year program was launched in May 2001.
The most recent tranche allocation followed a visit to Yerevan last November by Horst Koehler, the IMF’s managing director. Koehler praised recent years’ robust economic growth in Armenia and urged its government to “stay the course.”
“Preliminary information suggests that the reform program remained broadly on track and the main targets were met [in 2003],” the IMF statement said, referring to the almost 14 percent growth rate reported by the Armenian authorities. “The business environment has also improved, contributing to an increase in investment.”
The fund cautioned at the same time that “there is not yet enough information” on the growth’s impact on poverty and employment. It also reiterated long-standing IMF calls for “improvements in the transparency and efficiency of tax and customs administration.”