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A senior official from the International Monetary Fund has hailed sweeping economic reforms promised by the Armenian government and indicated the IMF’s readiness to allocate a fresh loan to Yerevan.

The official, Hossein Samiei, headed an IMF team that met with Prime Minister Karen Karapetian and other senior Armenian officials during its latest visit to the country which ended on Wednesday. In a statement issued at the end of the two-week mission, Samiei said they held “productive discussions” on the government’s economic policies planned for the coming months and years.

“The staff team welcomes the government’s intention to implement a comprehensive reform agenda, supported by the 2017-22 development program,” he said. “This agenda appropriately aims at promoting higher and more inclusive growth.”

“Good progress was made in identifying reform priorities and policies to maintain macroeconomic and fiscal stability,” added Samiei.

The five-year policy program cited by the IMF official was approved by the Armenian parliament last June. It commits the government to ensuring that the Armenian economy grows by around 5 percent annually on the back of soaring exports. The government is supposed to achieve this objective by improving the domestic investment climate, assisting export-oriented manufacturers and combatting corruption.

Samiei stated in April 2017 that Karapetian’s cabinet is committed to “decisive” reforms which he said are essential for faster growth. Visiting Yerevan again in December, the high-ranking IMF representative reportedly praised government efforts to improve tax administration.

Switzerland - Armenian Prime Minister Karen Karapetian addresses Swish businesspeople in Zurich, 22Jan2018.
Switzerland - Armenian Prime Minister Karen Karapetian addresses Swish businesspeople in Zurich, 22Jan2018.

The head of Armenia’s State Revenue Committee (SRC), Vartan Harutiunian, has repeatedly pledged to crack down on widespread tax evasion and corruption among tax officials. Harutiunian, who is a figure close to Karapetian, has made many senior personnel changes in the SRC since being appointed to run the tax and customs service in late 2016.

The total amount of taxes and customs duties collected by the SRC rose by over 7 percent last year. Economic growth in Armenia accelerated to 7.5 percent in 2017, according to official statistics.

Samiei’s statement did not specify the likely amount of the new IMF loan which would “assist the government in achieving Armenia’s vision to become a diversified middle-income economy.” It said more talks on the loan will be held with Armenian officials in the months ahead.

The IMF’s most recent lending program for Armenia, worth roughly $115 million, was launched in 2014 and completed last year.

Karapetian vowed to implement “long-lasting fundamental reforms” when he addressed top military officials in Yerevan on March 19. The pledge came less than one month before President Serzh Sarkisian completes his final term in office and Armenia switches to a parliamentary system of government.

Sarkisian is widely expected to become prime minister later in April. Some media reports have suggested that Karapetian would be appointed as first deputy prime minister in that case. The current premier has been coy about his political future in his public statements.

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