2016年-IMF国际货币组织全球_Republic_of_Armenia_Third_Review_Under_the_Extended_Arrangement_and_Request_for_Waiver_and_Modification_of_Performance_Criteria_101页_1mb

Summary of the Third Review Under the Extended Arrangement for the Republic of Armenia

Core Content

The International Monetary Fund (IMF) completed the third review of Armenia's performance under a three-year Extended Fund Facility (EFF) arrangement on June 15, 2016. This review included a request for waiver and modification of certain performance criteria (PCs). The approval of the review enabled the release of SDR 15.65 million (approximately US$22.01 million), bringing total disbursements under the arrangement to SDR 50.87 million (about US$71.53 million).

Main Points

• Program Performance: Most performance criteria and indicative targets were met, with the exception of the end-December 2015 fiscal deficit PC, which was missed by 0.3% of GDP due to higher-than-budgeted VAT refunds and the non-completion of an asset sale. The fiscal deficit for 2015 was 4.8% of GDP, slightly above the original projections. The end-December 2016 inflation and external debt concessionality indicative targets were also missed, but most end-March 2016 targets were met.

• Economic Performance: Real GDP growth remained moderate at 2.2% in 2016, driven by export-related supply-side factors in mining and agriculture. Nominal GDP growth was lower than expected due to the decline in the GDP deflator. Inflation turned negative in 2016, and monetary conditions stabilized. The central bank reduced its FX interventions and lowered the policy rate by 2.5 percentage points since August 2015.

• Fiscal Policy: The authorities requested a waiver for the missed fiscal deficit PC and a modification of the end-June 2016 fiscal deficit and budgetary domestic lending PCs. The new Tax Code, submitted to the National Assembly, aims to broaden the tax base, increase revenue, and support fiscal sustainability. The code includes measures such as a 5% tax on dividends, VAT applicability for agricultural businesses above a certain threshold, and increased excise taxes on alcohol and tobacco.

• Monetary Policy: The central bank's actions have helped stabilize monetary conditions and maintain financial stability. The shift from a net domestic assets (NDA) PC to a monetary policy consultation clause was approved to better align with the inflation targeting framework. Further normalization of monetary conditions is expected to bring inflation closer to the target and support bank lending.

• Financial Sector: Bank capitalization remains high due to compliance with minimum capital requirements, but profitability and loan performance have weakened. The banking sector has experienced negative credit growth, which has started to improve.

• External Sector: Exports of goods and services remained relatively stable, while imports declined due to weak domestic demand and lower import prices. The current account deficit is projected to remain low at 3% of GDP. The country's international reserves increased, and import cover improved.

• Geopolitical and Economic Risks: The outlook remains challenging due to continued recession in Russia, weak global demand, and uncertainty about copper prices and global financial conditions. However, the risks are manageable, and the program is expected to stay on track with continued implementation of reforms.

Key Information

• SDR Disbursements: Total disbursements under the arrangement reached SDR 50.87 million (about US$71.53 million) after the third review.
• Extended Arrangement: The extended arrangement for SDR 82.21 million (about US$115.60 million) was approved on March 7, 2014.
• Fiscal Deficit: The 2015 fiscal deficit was 4.8% of GDP, and the 2016 deficit is projected at 4.1% of GDP.
• Tax Code: The new Tax Code is expected to increase tax revenues and improve fiscal sustainability.
• Exchange Rate: The end-of-period exchange rate was 484 dram per US dollar, and the average rate was 478 dram per US dollar.
• IMF Staff Support: The staff supported the authorities' requests for waiver and modification, emphasizing the importance of structural reforms and fiscal discipline.

Performance Criteria and Modifications

• Waiver Request: A waiver was granted for the missed end-December 2015 fiscal deficit PC.
• Modification Requests: The end-June 2016 fiscal deficit and budgetary domestic lending PCs were modified.
• Shift in Conditionality: The NDA PC was replaced with a monetary policy consultation clause to better align with the inflation targeting framework.

Structural Reforms

• Tax Reforms: The new Tax Code includes measures to broaden the tax base and improve revenue collection.
• Monetary Policy: Greater two-way exchange rate flexibility and continued normalization of monetary conditions are expected.
• Financial Sector Resilience: Strengthening the financial sector through prudential regulations and crisis preparedness is a key focus.
• Energy Sector Recovery: A financial recovery plan for the energy sector was adopted.

Outlook

• Short-Term: Growth is expected to remain subdued at around 2.2% in 2016, with inflation averaging about 1.0%.
• Medium-Term: Gradual recovery in growth is anticipated, supported by improved global and regional conditions and continued fiscal consolidation.
• Fiscal Consolidation: The primary deficit is targeted to be reduced below 0.8% of GDP by 2018, with the debt ratio on a declining path.