YEREVAN–The Deputy Managing Director of the International Monetary Fund, Murilo Portugal, on Saturday said that the IMF would be willing, if the need arises, to provide “additional funds” to Armenia alongside a multi-million dollar loan recently approved by the IMF’s Executive Board, reported Armenpress.
The statement, made by Portugal, follows the approval last week of a nearly $13.6 million three year loan to Armenia by the IMF. The loan, approved by the IMF’s Executive Board on Wednesday under its Poverty Reduction and Growth Facility program, will enable Armenia to immediately drawn about $1.9 million. The loan’s intent, according to the IMF, is “to support the government’s economic program through 2011.”
Praising Armenia Saturday for its ability to deliver double digit economic growth despite a dual economic blocked by Turkey and Azerbaija, Portugal said the IMF seeks to “promote Armenia’s integration into the world economy.”
During recent years the country has been able to implement a large number of the economic programs put forth by the IMF, Portugal said, adding that “high tempos of economic growth and low tempos of inflation,” as well as the reduction of poverty in the country all contributes to the IMF’s “trust in Armenia.”
He Also commended Armenia for its ability to whether the global financial storm that has severely curtailed many of the world’s economies, attributing it to Armenia’s ability to “preserve the tempo of economic growth.”
Following the Executive Board’s approval of the loan package Wednesday, Portugal stated that “the worsened global macroeconomic outlook has increased uncertainty, but Armenia is in a strong position to withstand the impact of the global economic downturn.”
Portugal did, however, warn of the risks of “inflationary pressures” on Armenia. “A gradual deceleration of growth in Armenia may help dampen inflationary pressures. It may also contribute to reducing the external current account deficit, which has increased on the back of rising imports and sluggish exports, despite strong remittance inflows. Medium-term prospects, although highly uncertain, remain benign in view of favorable investment opportunities,” he said Wednesday.
Armenian banks continue to register profitable activity, Portugal said Saturday, adding that “capital investmen’s and the inflow of official transfers continue.”
He also said that the percentage of foreign investmen’s in Armenia has not decreased despite the global financial crisis, noting, however, that 75% of money transfers and the 70% of foreign direct investmen’s in Armenia came from Russia during the three months of this year.
The IMF economist predicted that Armenia’s economic growth would reach 8% in 2009, lower than previous years’ indicators. He noted, however, that this level of growth, however, will, in general, be relatively higher than other countries.
According to many analysts familiar with the IMF’s programs in the former Soviet Union, the US-backed Fund’s push for the rapid %u218liberalization’ of Armenia’s agriculture, industry, as well as its fiscal policies has left much of its population in poverty, creating only a small wealthy elite. The transformation of Armenia’s economy along the IMF’s standards has also promoted an atmosphere of corruption and graft and opened up Armenia’s market to a multitude of multinational corporations that have exploited its raw materials at the expense of the environment.