ArmInfo.The World Bank represented by the International Bank for Reconstruction and Development (IBRD) will provide Armenia a loan of $ 45.8 million to finance the country's state budget deficit in 2019. At a meeting on December 12, the country's parliament began discussions on an agreement with the Bank.
According to the Deputy Minister of Finance of Armenia Armen Hayrapetyan, the funds will be used to implement a number of measures and reforms in the field of economic management and the fiscal public sector, as set out in the Mutual Policy Action Plan, which is a prerequisite for obtaining budget support. The main objectives of the program are to improve the institution of customs control, protect economic competition, and public procurement schemes. It was also envisaged to strengthen the rules and processes in the field of competition, trade and quality, increase tax administration and the efficiency of capital costs, strengthen the fight against corruption, and carry out reforms in the judicial system and public service. In all these areas, the necessary work was carried out, normative and legal acts were adopted, which were positively evaluated by the IBRD.
The deputy minister also said that the loan is provided for a period of 25.5 years, with a grace period for payments in the first 14.5 years with a floating rate, which is 6-month EURIBOR + fixed spread. The interest rate on the loan will be fully fixed after deduction of the loan amount. The frequency of payments for servicing a loan is semi-annual. The outstanding loan amount is calculated as a liability at 0.25% per annum from the 60th day following the date of signing the contract. It is also expected that a one-time commission of 0.25% of the loan amount will be paid within 60 days after the agreement enters into force.
To note, according to the recently approved budget of the country, in 2020 it is planned to ensure GDP growth of 4.9%. At the same time, nominal GDP will grow by about 529 billion drams - from 6.566.5 billion drams expected by the end of 2019 to 7.095, 1 billion drams included in the document. The budget revenue item with 1.698 trillion drams fixed in the draft budget for the current year decreased to about 1.695 trillion drams or 23.9% of GDP (1.567 trillion or 23.9% of GDP this year and actual 1.341 trillion or 22.3% of GDP for 2018 year). Costs declined from the previously forecasted 1.880 trillion drams to 1.855 trillion drams. As a result, the deficit indicator also decreased - to about 160 billion drams and will make up 2.3% of GDP against the previously forecasted 182.6 billion drams (2.6% of GDP). The deficit will be financed in the amount of 210.5 billion drams from domestic sources and another 50.5 billion drams are expected to be attracted from external sources.