Armenian Energy Problems Can Be Solved Without Rate Increases

YEREVAN (Noyan Tapan)–Under a program submitted by the Armenian government to the IMF Board of Directors–the government made a commitment to maintain the 4 percent GDP growth and the 8 percent inflation rate. Advisor to the manager of the IMF Second European Department Louis Valdevieso pointed out that the given macroeconomic indications are quite real–taking into consideration the effect of the Russian crisis on Armenia’s economy. According to him–there were serious problems in Armenia’s energy sector. These problems will be solved not by raising the electricity rates–but by improving the energy sector’s accounts.

After the IMF Board of Directors approves the Armenian government’s economic program for the last quarter of 1999–Armenia will receive the last installment of the ESAF credit worth $28 million. Next week the second SAC-3 credit installment of $25 million and in December the third installment of the same amount will also be received.

Minister of Finance Levon Barkhoudarian reported that a long-term and consistent policy of serving the foreign debt is currently being developed–which is supposed to prevent the foreign debt from exceeding "the upper limits." Barkhoudarian pointed out that some 90 percent of credits are on easy terms.

The government also made a commitment to reduce the budget debts. In its turn the Central Bank made a commitment to make the credit-dram policy more transparent.

The World Bank hails the new Armenian government’s willingness to continue the privatization process and tighten banking supervision.

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