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The World Bank and International Monetary Fund have allocated over $71 million in fresh loans to Armenia which will be mostly used for financing its budget deficit that has widened this year due to worse-than-expected tax collection.

The bank said on Friday that its budgetary loan worth $50 million will support a “wide range of reforms” promised by the Armenian authorities. “This operation will help to improve the country’s competitiveness and business environment, and enhance employment opportunities”, the head of its Yerevan office, Laura Bailey, said in a statement.

The World Bank funding was announced the day after the Armenian parliament approved the 2017 state budget envisaging major cuts in public spending. The government hopes to rein in the budget deficit which is expected to equal about 6 percent of GDP this year because of a shortfall in tax revenue reflecting sluggish economic growth.

The IMF approved of the fiscal measures planned by the government when it disbursed late on Wednesday a fresh $21.2 million installment of a $112 million lending program for Armenia launched in March 2014.

The IMF’s three year Extended Fund Facility (EFF) is designed to support macroeconomic stability in the country. The latest disbursement raised to $90 million million the total amount of EFF funding made available to the government and the Central Bank of Armenia to date.

“The authorities remain committed to fiscal consolidation and debt sustainability, as embodied in their fiscal rule, which aims to ensure that debt remains below 60 percent of GDP over the medium term,” said David Lipton, the fund’s first deputy managing director. “In this context, they have developed a fiscal consolidation plan for 2017 and beyond.”

Lipton also stressed that “further structural reforms” are essential for a faster growth of the Armenian economy. “Strengthening domestic competition and regulatory reforms are pivotal to creating a more broad-based, private sector-led economy,” he said.

Both lending institutions again praised Armenia’s new and comprehensive Tax Code that was enacted this summer over strong opposition objections. Armenian opposition lawmakers denounced its provisions envisaging higher taxes on fuel, alcohol and tobacco as well as increases in income tax levied from many employees.

“The new Code is a major step forward in the tax policy reform,” insisted Gohar Gyulumyan, a World Bank official in Yerevan.

“By revisiting the level and structure of income taxes, reducing the number of exemptions and tax gaps, increasing excise taxes and strengthening coverage of high-wealth individuals and large companies, the Code will lead to higher revenue mobilization in the medium-term,” she said.

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