Thursday, December 7 2017 19:37

ArmInfo. The Council of the  Eurasian Stabilization and Development Fund (EFSD), which is managed  by the Eurasian Development Bank (EDB), approved the granting of a  third tranche of the $ 100 million financial loan to Armenia based on  Armenia's fulfillment of all tranche conditions. The funds are  transferred to the account of the RA Ministry of Finance on December  6, 2017. Taking into account the previous tranches, to date, the  country has been provided with the full amount of a loan of $ 300  million provided for the support of the RA Reform Program during  2015-2017.

As the press service of the EDB told ArmInfo, the final report on the  implementation of the financial loan of the EFSD, which supported the  implementation of this program, will be prepared and submitted for  consideration to the Fund's Board in 1 quarter of 2018.

According to the source, the key reforms supported by the EFSD  Program are aimed at improving the efficiency of public financial  management, improving the investment climate and liberalizing the  energy market in Armenia. The program also continued to implement  reforms to dedollarize the economy and increase confidence in the  banking system. "The level of financial dollarization has been  reduced and measures have been implemented to increase public  confidence in the banking system as a result of the adoption of a  number of regulatory acts by the Central Bank of Armenia and  amendments to the law" On Guaranteeing Deposits ": the amount of the  guaranteed deposit was increased, the procedure for obtaining it was  simplified, The share of foreign currency in the deposit base  decreased from 71.6% at the end of 2014 to 62.4% at the end of  September 2017, the dollarization of loans for the same period  decreased from 66.6% about 62.7%, supported by the policy of the  Central Bank of Armenia, aimed at increasing the availability of AMD  loans and profitability on deposits in national currency .The deposit  base as of the end of September 2017 grew by 16.7% in the year-end,  which was, in particular, law "On Guaranteeing Deposits", the EDB  said.

"In the current year, there was a significant fiscal consolidation in  Armenia. At the end of 9 months, the state budget deficit amounted to  2.5% of GDP (against 4.1% of GDP in the same period in 2016), solely  due to a reduction in current expenditures. This was largely  facilitated by meeting the conditions of the third tranche to limit  the budget deficit without taking into account external loans to  finance targeted infrastructure programs, which reduced this deficit  to 1% of GDP, against 2.4% of GDP in the last year.  The expected  deficit in 2017 will be about 3.6% of GDP, against 5.5% of GDP a year  earlier. Improving the fiscal position has significantly slowed the  growth of public debt. The level of government debt for 9 months of  this year increased by 0.4 percentage points. - up to 51.8% of GDP,  compared with an increase of 3.3 percentage points. - to 47.4% of GDP  for the same period in 2016 and by 7.7 percentage points. in general  for the year 2016. In accordance with the draft law "On the state  budget of the Republic of Armenia for 2018", the deficit of the state  budget should not exceed 2.7% of GDP," the EDB said in a statement.

In particular, with the financial support of the EFSD, the Government  of the Republic of Armenia has revised 95 normative legal acts.  According to EFSD estimates, the introduction of the Tax Code will  lead to an increase in tax revenues by 2 pp. GDP accumulated in the  course of 2017-2021. "This will contribute to raising rates of some  types of taxes, including excises and royalties, as well as reducing  tax benefits and improving tax administration," the Bank noted.