ArmInfo.The International Monetary Fund supports the structural reforms initiated by the new government of Armenia and predicts a slowdown in the country's economic growth to 4.5 percent this year from 5.2 percent in 2018 amid less favorable external factors, said the Fund's Resident Representative in Armenia, informes by fomag.ru with reference to Reuters.
The growth of the Armenian economy, which has a population of 3.2 million, slowed last year from 7.5 percent a year earlier, not reaching the target level of 6.5 percent, mainly due to the deteriorating situation in the trading partner countries as well as a slowdown in agriculture and mining.The IMF Resident Representative, Yulia Ustyugova, told Reuters that this year the Fund predicts a weakening of the growth effect on the demand side amid a reduction in the volume of cash transfers from abroad, which, she said, can be offset by higher investment. According to her, the possible risks with respect to the forecast may be external, including tensions in international trade and international financial markets, as well as a possible surge of geopolitical tensions in the region.
"However, the main challenge for the government is to promote the planned structural reforms while maintaining macroeconomic and financial stability," Ustyugova said in response to e-mail sent to Reuters.The IMF supports the "ambitious" government reform plan led by Prime Minister Nikol Pashinyan, who came to power last spring as a result of a peaceful revolution that dismissed the former head of government from this post.Pashinyan strengthened power in December last year, when his political bloc won in the early parliamentary elections.The reforms include changes in tax and customs legislation, as well as measures to combat corruption and improve the business environment.Ustyugova said that the IMF expects to reduce the balance of payments deficit to 6-7 percent in 2019 from 8 percent last year.She added that the Fund supports the monetary policy of the central bank, which, according to her, contributes to maintaining a stable level of inflation.In February, the IMF reached an agreement with the government on a three-year program worth $ 250 million, which can be requested if necessary. The program as a whole is aimed at supporting reforms and strengthening the economy's resistance to negative external influences.