ArmInfo.IMF staff and the Armenian authorities have reached a staff-level agreement on the second review under the Stand-By Arrangement (SBA) as well as on policies under a Resilience and Sustainability Facility (RSF). The IMF Board is expected to discuss both programs together in a meeting in mid December.
Washington, DC: An International Monetary Fund (IMF) team led by Alexander Tieman visited Yerevan from September 16-29, 2026, to conduct discussions for the second review under the Stand-By Arrangement (SBA) with Armenia and the authorities’ request of a concurrent Resilience and Sustainability Facility (RSF). At the conclusion of the discussions, Mr. Tieman issued the following statement:
“I am pleased to announce that the Armenian authorities and the IMF team have reached a staff-level agreement on policies for the completion of the second review under the three-year SBA as well as for a new concurrent RSF. The SBA will continue to support macroeconomic stability and structural reforms for sustainable growth, while the RSF will focus on policies that increase long-term resilience to natural disasters and climate-related shocks. The agreement is subject to approval by the IMF’s Executive Board, scheduled for December 2026. Board approval of the SBA review would unlock access an additional US$ 25 million (SDR 18.4 million), bringing the total access to about US$ 75 million (SDR 55.2 million) since the start of the SBA in December 2025. Board approval of the RSF would unlock access of up to SDR 193.2 million (approximately US$ 262 million), subject to successful completion of four reviews over the coming two years.
“Armenia’s real GDP growth, projected at 5.5 percent, has softened relative to 2025 (7.1 percent) but remains robust. Inflation is projected at 4.8 percent for the end of 2026, above the target of 3 percent, driven by strong domestic demand and elevated logistics costs and commodity prices resulting from the war in the Middle East. Fiscal performance remains strong, with the projected 2026 fiscal deficit of 4 percent of GDP expected to outperform the budget, despite higher spending on health insurance and pensions. Central government debt remains just below 50 percent of GDP. The current account deficit is projected to narrow slightly from 2025, to 8.5 percent of GDP, supported by production at a new gold mine. Strong capital inflows have enabled the Central Bank of Armenia (CBA) build a stronger international reserves position through opportunistic foreign exchange purchases. The banking system remains profitable, with strong capital and liquidity buffers.
“Over the medium term, growth is expected to moderate to around 5 percent, with ongoing structural reforms increasing resilience to shocks. Downside risks to the outlook stem largely from the challenging geopolitical environment, including the Middle East conflict, which puts upward pressure on inflation and could negatively affect exports. On the upside, further opening of borders could increase trade and investment opportunities.
“The draft 2027 budget targets a deficit of 3.4 percent of GDP, broadly in line with the authorities’ Medium Term Expenditure Framework (MTEF), preserving macro-fiscal stability while supporting Armenia’s priority spending needs. The authorities remain committed to broadening the VAT base and strengthening revenue administration, while carefully prioritizing expenditures to support the gradual fiscal consolidation over the medium term. Continued improvements in public financial management and public investment management remain critical to support the overall fiscal effort.
“Amid continued inflationary pressures, decisions by the CBA to raise the policy rate by 50 basis points cumulatively in September and November are welcome. The CBA should continue to monitor economic developments and inflation expectations and stand ready to adjust the policy rate as needed. The CBA’s efforts to build up international reserves, amid continued capital inflows, should continue to strengthen resilience to potential shocks. To further increase financial sector buffers, the CBA is appropriately increasing banks’ countercyclical capital buffer in two steps from 1.75 to 2.25 percent, while continuing to monitor financial stability risks and enhancing supervisory toolkit and capacity.
“Armenia’s structural reform agenda, as outlined in the government program, appropriately focuses on building human capital, supporting an open, inclusive, competitive, knowledge-based and innovative economy that is increasingly resilient to climate shocks. The SBA supports the authorities’ plans to further improve the business environment and strengthen the quality of statistical domains. The RSF will directly support the authorities’ goals to increase energy security and reduce macroeconomic vulnerabilities related to climate-related shocks. The program supports improvements in fiscal risk analysis, public investment management, the management of water and electricity resources, and climate-related data governance and disclosures, which can mobilize additional climate-related finance going forward.
“The IMF team thanks the Armenian authorities, private sector representatives, development partners, and the diplomatic community for fruitful discussions and cooperation.”
