YEREVAN, June 5. /ARKA/. The Armenian government approved today a bill on ratification of the letter of agreement with the IMF on the use of the $280 million stand-by arrangement, allocated to Armenia in May 2019, and attraction of an additional loan, signed on May 23 and June 1, 2020.
Finance Minister Atom Janjughazyan said the government may now attract a total IMF funding of $315 million. He said the coronavirus pandemic is slashing tax revenues both in Armenia and other countries, which in turn is resulting in budget deficit, while the spending remains unchanged. ” Therefore, the borrowed funds will be used to finance the budget deficit. Accordingly, this will automatically increase Armenia’s foreign debt ,” the minister said.
According to him, these are not the only consequences of the pandemic, since there is also a risk of lower incomes, salaries, and higher unemployment rate.
The minister emphasized that since the outbreak of coronavirus the Armenian government has been supported by partners from international financial institutions, investment funds – both internal and external.
“In late March and early April, given the situation with the spread of coronavirus, we completed the next stage of negotiations with IMF in a remote mode and revised the program. In particular, it was agreed that the funds available under the program could be increased to $315 million. Of these about 206 million SDRs (about $280 million) are already available,” Janjughazyan said.
He said the additional $ 35 million will be available after the third revision of the program, scheduled for autumn.
In its latest World Economic Outlook, the IMF forecast that the Armenian economy will shrink by 1.5 percent this year due to the coronavirus pandemic, but will grow by 4.8% in 2021. The Armenian Ministry of Finance expects a 2 percent drop in 2020 GDP. -0–