IMF-Teresa Daban Sanchez: Armenia suffered severe shocks, but was able to withstand them with honor due to the presence of buffer and flexibility of the Central Bank`s policy

ArmInfo. Armenia suffered severe  shocks, but was able to come out of the situation with honor due to  the presence of buffer and flexibility of the Central Bank's policy.  This opinion was expressed on 4 July at a conference in Yerevan by  the representative of the IMF Teresa Daban Sanchez, explaining that  this shock was massive and long lasting almost 40%, as a result of  which transfers reduced by almost 40%, revenues fell by 20%, tax  revenues fell to the budget, something close to collapse was  observed.

"Armenia managed to avoid a stronger impact from the shocks than it  could be, and this is due to the stability of the banking system, the  flexible policy of the Central Bank, all measures of macroprudential  regulation, the uncyclical reaction of the budget. And all this was  done in a difficult situation when the tax code was just approved,  which made the process more complicated, but Armenia was able to  avoid the stronger influence that countries with a small market tend  to feel, but I would like to specifically note one task - the  national debt in terms of long-term and repayment schedule looks  good, but the size and the impressive growth trends are not  encouraging, and I believe that we need to take steps to reduce it,"  said the IMF representative in Armenia.

According to statistical data, Armenia's national debt reached $ 6.1  billion by June 2017, of which external debt is $ 4.9 billion, and  domestic debt is $ 1.2 billion. In the annual state debt of Armenia  increased by 15.1%, including foreign debt - by11.4%, while the  domestic one - by 50%. In 2016, Armenia's national debt grew by17%  due to the growth of external debt by 11% and domestic - by 49%.

To note, according to the IMF forecast, Armenia's GDP growth in 2017  will be 2.9%. The state budget of Armenia for 2017 laid the GDP  growth by 3.2%, but the government voiced a 5% growth. According to  the updated forecast of the Central Bank of Armenia, the GDP growth  of Armenia in 2017 will be 3.2-4.4%.