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.