Armenia Will Not Get Second Installment of Loan

YEREVAN (Noyan Tapan)–Armenia will not receive the second installment ($20 million) of the World Bank Structural Adjustment Credit (SAC-2).

As reported from the World Bank mission to Armenia–among the preliminary conditions for the SAC-2 credit is the successful end of the negotiations with the Armenian government around the ESAF credit of IMF.

The SAC-2 credit program of $60 million was approved by the World Bank in August this year. The first installment was received in September ($40 million). This credit was aimed at covering the budget deficit.

As for the so-called ESAF credit (a possibility to speed up structural reforms)–its second installment ($25 million) will be received in Armenia early next year. Reporting that–IMF representative to Armenia George Anaiotos noted that IMF experts are still debating over the measures to correct the situation that appeared in 1997 and amendmen’s in the main trends of economic policy next year–after which they will make report at the IMF Executive Council. He especially stressed the importance of IMF’s position–following which the preference should be given to the deepening of structural reforms and expansion of social programs.

According to Anaiotos–IMF experts are concerned with the macroeconomic tendencies reported in Armenia in 1997 (in particular–high inflation reaching 19% – almost two-fold higher than projected). According to him–that served as an objective ground for such development of events.

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