CBA, IMF discuss introduction of new approaches to monetary policy

ArmInfo.On September 13, head of the Central Bank of the Republic of Armenia Martin Galstyan received the  delegation of the International Monetary Fund, headed by the head of the IMF mission in Armenia, Iva Petrova. This is noted in the message of the Central Bank of the Republic of Armenia, which states that  among the issues raised, the parties also discussed the introduction of new approaches to monetary policy.

The Governor of the Central Bank introduced the current results of  the financial sector of Armenia in 2023, presented current trends in  economic development, challenges and prospects, priorities of the  implemented policies, and reforms of the Central Bank.

Head of the IMF mission in Armenia, Iva Petrova, expressed  satisfaction with the forum organized at a high level within the  framework of the 30th anniversary of the Armenian Dram.

During today's meeting, the Central Bank of Armenia and the IMF  discussed the introduction of new approaches to monetary policy, the  tasks and goals of the IMF mission, as well as issues related to  price and financial stability, macroprudential policy, and the second  stage of the program to support economic reforms in Armenia.

In mid-June this year, the IMF, under the new SBA program, provided  Armenia with access to 18.4 million SDR (about $24.5 million),  bringing total access to SDR 36.8 million (about US$49 million). And  on the same day, it confirmed its forecast for 2023 for Armenia's GDP  growth at 5.5%. As they note: "The economic outlook for 2023 is  generally positive, although risks  remain substantial. GDP growth is  projected to decelerate but strong  momentum, consumption and  investment are expected to keep it at 5.5  percent in 2023. With  services trade and remittances normalizing, the  current account  deficit is expected to widen in 2023. Inflation is expected to  stabilize at the CBA's target of 4 percent within a year.  The  outlook is subject to elevated risks stemming from a challenging   external environment, including regional tensions, tighter global   financial conditions, and a slowdown in major trading partners."

The IMF also summarized: "Macroeconomic policies need to prevent  overheating of the economy in  the short term, while supporting  inclusive and resilient growth in  the medium term. To elaborate:   Should growth and revenues be stronger than projected, building   fiscal buffers is a priority. At the same time, revenue mobilization   efforts should continue, including by broadening the tax base and   tackling informality.  Decisive and pro-active monetary policy  tightening has been  successful in containing inflationary pressures,  but monetary policy needs to remain vigilant and data dependent.  Financial sector risks  related to the real estate sector require  close monitoring by strengthening supervisory tools.  To unlock  Armenia's long-term growth potential, continued progress  with  implementation of structural reforms is needed, including by   boosting trade links and diversification, enhancing access to   finance, completing governance reforms, and improving climate change   resilience."