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A mission of Executive Directors of the International Monetary Fund (IMF) comprising Ms. Meg Lundsager, Messrs. Age Bakker, Ambroise Fayolle, HE Jianxiong, Thomas Moser, and Klaus D. Stein, issued the following statement on October 12, 2009 in Yerevan at the conclusion of its visit to Armenia:

“We are grateful for the opportunity to visit the country and thank the people of Armenia, President Serzh Sargsyan, Prime Minister Tigran Sargsyan, Chairman of the Central Bank Arthur Javadyan, Minister of Finance Tigran Davtyan, and Minister of Economy Nerses Yeritsyan for their warm hospitality and productive discussions. Our visit has offered us a unique opportunity to hold discussions with a wide range of stakeholders, including representatives of the public and private sectors, the civil society, and development partners.

“Armenia has been severely hit by the global crisis, with real GDP expected to decline by about 15 percent in 2009. Foreign inflows have fallen and tax revenues have dropped, which have weakened the balance of payments and the public finances. These developments posed additional hardships on the Armenian population.

“We commend the authorities for efficiently addressing these challenges. Fiscal policy continues to be expansionary, given that, with the help of the IMF and other donors, the government has been able to keep expenditures close to the original 2009 budget, while increasing spending on priority infrastructure projects.

“The financial system remains stable and the return to a floating exchange rate on March 3, 2009 has been a success. The Central Bank (CBA) has expanded its instruments to provide liquidity to the banking system in order to stimulate credit to the private sector. At the same time, inflation is on track to meet the authorities' end-2009 target of 4+1.5 percent.

“Continued progress in tax and customs administration reforms will be critical to ensuring sound public finances, and a fair and equitable tax burden. Once the economy recovers, the government will need to reduce the fiscal deficit to preserve medium-term fiscal and debt sustainability, while continuing to support needed public spending and investment.

“We welcome promising signs for regional cooperation, which will help economic development in the region. We support the IMF continuing excellent relationship with the Armenian authorities.”