The World Bank praised the Armenian government’s “ambitious” reform agenda as it announced the release of a fresh $50 million budgetary loan to Armenia on Friday.
The low-interest loan repayable in over 25 years is part of $146 million in foreign funding which is due to finance about half of the country’s state budget deficit projected for this year.
A senior Armenian official announced its impending disbursement when the government approved similar lending agreements with Germany’s state development bank KfW and the Asian Development Bank (ADB) on October 31. KfW is to lend Yerevan 40 million euros ($44 million) while the Manila-based ABD will provide two other budgetary support loans worth a combined 45.6 million euros.
Armenia’s 2019 fiscal deficit is projected at roughly 150 billion drams ($316 million). The figure is equivalent to around 2.5 percent of GDP.
In a statement, the World Bank said its latest loan will contribute to government efforts to combat corruption, improve Armenia’s business environment and reform the judicial system.
“The newly elected government, armed with a strong mandate for change, has put forward an ambitious five-year reform program, which aims to improve competitiveness and spur economic growth while meeting the people’s demands for good governance, greater transparency, accountability and effective public services,” read the statement.
“This particular [lending] operation rewards the good governance that has been achieved so far, which is very tangible in a number of areas,” Sylvie Bossoutrot, the head of the World Bank office in Yerevan, told RFE/RL’s Armenian service.
“If we look at a number of sectors we can pinpoint several tangible reforms,” said Bossoutrot. She singled out the fight against corruption and a sizable increase in the government’s tax revenues.
The World Bank official also praised Prime Minister Nikol Pashinian’s government for raising the salaries of some public sector workers and planning to boost government spending on education and healthcare next year.
The latest allocation raised to more than $2.4 billion the total amount of World Bank loans received by Armenia since 1992. The country’s total public debt stood at $7.1 billion, or just over 50 percent of GDP, as of last month.