World Bank Says Armenia Economy On Right Track

YEREVAN (RFE/RL)–A senior official from the World Bank has praised Armenia for its economic performance and pledged further assistance to its government in carrying out reforms–government sources said on Monday.

"The Armenian economy is now making serious progress," Judy O’Connor–the Bank’s regional director for Armenia and Georgia told President Robert Kocharian–according to his press office. The two were also reported to have discussed details of an upcoming visit to Armenia by James Wolfensohn–president of the World Bank. "President Kocharian reaffirmed Armenia’s resolve to continue reforms and cooperate with the World Bank," the press service said.

Last December–the Bank’s board of directors approved a new $65 million loan package to Armenia following its improved economic performance in 1998. The loan will largely go to finance the government’s 1999 budget deficit–projected at 5.3 percent of Armenia’s gross domestic product. The government plans to cover the spending gap–projected at roughly $100 million–mainly by external borrowing.

According to official data–the Armenian economy grew by 7.2 percent last year under a record low single-digit inflation. Analysts say the growth would have been higher had it not been for the ongoing economic crisis in Russia. The turmoil meant that many industrial enterprises in Armenia have lost their traditional markets in Russia.

In another sign of its confidence in Armenia–the Bank approved last month the release of a $53 million loan to the Armenian energy sector–which is in desperate need of capital investmen’s.

O’Connor was also quoted as saying that the Bank is closely monitoring the use of its resources by the Armenian government and has found no cases of their "serious" misuse so far.

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