IMF and Armenia Conclude Negotiations

YEREVAN (Noyan Tapan)–The talks between International Monetary Fund and Armenia’s government ended successfully–according to Finance Minister Levon Barkhoudarian who spoke at a news conference on Monday.

He noted that the first $25 million portion of the IMF credit for this year will be provided to Armenia in June–after a relevant decision is approved by the IMF Board of Directors.

The IMF delegation for Armenia arrived in Yerevan May 1. The previous round of talks devoted to the second part of ESAF credit ended in failure this February.

According to the Minister–the package of documen’s worked out during the talks suggests implementation of structural reforms mainly in fields of taxation and credit–as well as other spheres such as the energy system.

Head of the IMF delegation to Armenia Thanos Katsambas said that the difficulties observed during the previous round of talks–in particular low tax assignmen’s–were overcome. In March and April–tax assignmen’s to the budget even exceeded the projected volume in Armenia. The new problems appeared in the current stage of negotiations (mainly connected with delays in budget paymen’s) were surmounted as well. Levon Barkhoudarian said that the burden of these expenses were assumed by the Central Bank which pledged to increase budget crediting up to 9 billion drams on the condition that it gets back 6 billion drams in the second half of the year at the expense of external financing. So the credit volumes of the Central Bank will not exceed the projected sum of 3 billion drams.

This regular credit by IMF is part of a three-year program worth $150 million and aimed at implementing economic reforms (the so-called ESAF credit). According to Levon Barkhoudarian–Armenia is getting the biggest quote in the history of IMF which makes up 85 percent of Armenia’s fee. Last year Armenia received two portions making some $50 million. In case this year’s first portion is successfully realized–Armenia will get the second one in the Fall.

Thanos Katsambas emphasized that IMF credits are aimed at promoting Armenia’s economic independence and voiced concern over decreasing export volumes of Armenia. He expressed confidence that the future progress of Armenia’s economy belongs to small enterprises.

It was also said that Katsambas will leave the post of head of IMF delegation for Armenia.

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