2024-09-30 19:16:25
At today’s meeting, the government approved the letter-agreement between Armenia and the International Monetary Fund signed on May 23 and June 1, 2020 “On the use of the funds of the reserve program and the introduction of additional borrowed funds”.
“At the end of last year, all forecasts assumed growth in more than 170 countries, while according to revised forecasts in April, it is estimated that there will be a decline in these countries, a 3.5 percent decline in the global economy was predicted, therefore, this situation cannot but have an impact on our on the budget indicators,” said Finance Minister Atom Janjughazyan.
He noted that it is assumed that the recession will lead to a decrease in tax revenues, which will lead to an increase in the deficit if spending remains the same.
“In order to finance the deficit, it is necessary to attract borrowed funds, therefore, an increase in the deficit will automatically lead to an increase in the debt,” Atom Janjughazyan said.
“In 2019, we approved a program with the IMF, which is considered preventive, and it was assumed that only in the event of external shocks we would take advantage of the loan opportunity provided by the IMF, while, taking into account the pandemic, we at the end of March, the beginning of April we completed the next round of negotiations remotely, the plan was revised. Within its framework, an agreement was reached that these funds can be available in a larger amount, equivalent to approximately 315 million dollars,” he said.
According to Janjughazyan, it will be used not for the balance of payments, but for the financing of budget programs, that is, it will be a budget support loan.
Currently, the Republic of Armenia has a total of about 206 million HPI (280 million USD) budget funds available, and another 25,714 million HPI (35 million USD) will become available as a result of the third review of the program.
The draft will be submitted to the Constitutional Court and then to the National Assembly for ratification. Deputy Finance Minister Armen Hayrapetyan will be appointed as the representative of the government in the Constitutional Court.