France has expressed readiness to lend Armenia up to 80 million euros ($90 million) in emergency funding designed help the South Caucasus state tackle the coronavirus crisis and its severe economic fallout.
French President Emmanuel Macron offered the low-interest loan in a letter to Prime Minister Nikol Pashinian publicized on Tuesday.
Macron voiced “solidarity” with the Armenian authorities’ efforts to contain the spread of the coronavirus and said that a third team of French medics will fly to Yerevan later this week to help their Armenian colleagues struggling to cope with the deadly pandemic.
He went on to inform Pashinian that the French Development Agency (AFD) stands ready to allocate a loan worth between 50 million and 80 million euros that would partly cover Armenia’s “needs for additional budgetary funding” and strengthen the country’s crisis management capacity.
The French government agency would provide this assistance in collaboration with the World Bank and other multilateral lending institutions, added Macron.
The Armenian government announced in late April plans to borrow more than $500 million to cushion the impact of an unfolding recession resulting from the pandemic. The government subsequently amended its 2020 budget to take account of 150 billion drams ($310 million) in coronavirus-related relief measures financed by it and a shortfall in tax revenues which is projected to total 170 billion drams this year.
In May, the International Monetary Fund disbursed a $280 million emergency loan to the authorities in Yerevan. The authorities announced afterwards that they will receive a separate $30 million IMF loan later this year.
The Armenian economy expanded robustly from 2017 through the first quarter of this year. It is now on course to contract by at least 2 percent in 2020.