Wednesday, April 12 2017 21:01

ArmInfo. According to IMF estimates, Armenian foreign debt is at a pretty high level, though it is acceptable yet. This was stated on April 12  to journalists by  Hossein Samiei, the IMF Armenia mission head.

According to the remarks of IMF mission head., already in 2017 Armenian Government had implemented numerous budget corrections to reduce the budget deficit. Besides, to settle the level of foreign debt, Armenia  had to reject some projects and decrease the level of capital expenditures, implemented based on external funding, because those would  impact positively the economy growth, but only for short term period.

Hossein Samiei said to have received positive indications about Karen Karapetyan's government, including specifically the changes made to the tax and customs spheres in terms of reducing the shadow and improving fiscal administration. The Head of the IMF mission said that a more effective fight against the black economy implies continued efforts toward expanding the tax network. Following the mission head, IMF supports also the decision of Armenia authorities to modify the fiscal rule stating that the foreign debt of the country should not exceed the mark of  50% GDP. " Fiscal rules are called to provide economic growth  within difficult period and to secure the acceptable foreign debt level at the same time, " he clarified.

"We also attach importance to attracting foreign direct investment, and we are pleased that such measures are already being implemented by your government. We met with the representatives of the Center for Strategic Initiatives and were pleased to see that active steps are being taken to improve the business environment and attract new investment," Hussein Samiei said.

According to Samiei, the Central bank should be ready for softening the terms of monetary policy, because that will conform to the limits of inflation planned. At the same time, taking into consideration the growth of global economic activities and higher speed of inflation, IMF thinks that financial regulator should be extremely careful while softening the monetary policy terms.

To remind, on December 9 the Executive Board  of the International Monetary Fund (IMF) completed the fourth review  of Armenia's performance under a three-year arrangement under the  Extended Fund Facility (EFF), the official website of IMF reports.  The completion enables the release of SDR 15.65 million (about US$21.24 million), bringing total disbursements under the arrangement  to SDR 66.52 million (about US$90.28 million). The extended  arrangement for SDR 82.21 million (about US$111.57 million) was approved on March 7, 2014.

In completing the review, the Executive Board also approved the  authorities' request for a modification of the end-December 2016  fiscal balance performance criterion. The revenue shortfall has been  mainly due to exogenous factors, and the higher capital expenditure,  which is externally financed at concessional terms, in large part  reflects a catch-up of past under-execution and provides some  counter-cyclical support.

To recall,  by the results of  2016, the public debt of Armenia totaled $5.9bln, in 2017 it will  become $6.250bln. According to the Minister, in the structure of the  total debt, the state debt is $5.4bln, and the Central Bank debt will  amount nearly $503mln. The ratio of public debt to GDP in 2016 was  54.5%. As Vardan Aramyan informed, in 2017, in case of providing the  budget rates, the amount of public debt of Armenia is forecasted to  be on the level of $6.250bln, including the CB debt, which is  expected to be $530mln.