Armenia’s Strong Growth Continues, IMF Approves Continued Support
The International Monetary Fund (IMF) has announced that its staff and the Armenian authorities have reached a staff-level agreement on the third review under the 2022 Stand-By Arrangement (SBA).
The SBA, treated as precautionary by Armenian authorities, aims to support the government’s policy and reform agenda to preserve economic and financial stability and facilitate sustainable growth.
The agreement follows discussions held by an IMF team led by Iva Petrova, during March 11-21, 2024, in Yerevan. Ms. Petrova noted the strong growth momentum in Armenia, with the economy expanding by 8.7 percent in 2023, driven by robust private consumption, trade, and investment.
Inflation declined significantly, reaching -1.2 percent in March, attributed to falling food prices, dram appreciation, and the lagged effect of monetary policy tightening. The fiscal deficit remained at 2 percent of GDP in 2023, lower than projected due to under-execution of spending.
Growth is expected to moderate but remain robust at 6.0 percent in 2024, driven by consumption and public capital spending. Inflation is anticipated to pick up in the second half of the year.
Risks to the outlook include geopolitical tensions and potential faltering of growth in trading partners.
The agreement under the SBA is subject to approval by the IMF’s Executive Board, which is scheduled to consider this review in mid-June.
The agreement would enable access to about US$24.4 million (SDR 18.4 million), bringing the total access to about US$97.7 million (SDR 73.6 million) since the inception of the SBA.
The IMF team expressed appreciation to the Armenian authorities, private sector, development partners, and diplomatic community for their cooperation and fruitful discussions.
