IMF Urges Armenia To Tackle Deficit

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Armenia's economy should recover this year after contracting sharply in 2009, the International Monetary Fund said on Wednesday, but urged the country to tackle its bulging budget deficit.

"After a very challenging year in 2009, output appears to have stabilized and real GDP is expected to recover in 2010," Mark Lewis, head of an IMF staff mission to Yerevan, said.

Armenia's national output slumped 14.4% in 2009 while the government forecast the economy to grow 1.2% this year.

Lewis said it was important that the Armenian government cut its budget deficit. The government has pledged to bring down to deficit to 6% of GDP by year-end from the current level of 7.5%.

"In light of debt sustainability concerns, the authorities should gradually reduce the deficit and rely as much as possible on concessional financing," said Lewis.

The staff mission also reached agreement with the government to extend a tranche of $74 million in loan, as part of the stand-by arrangement between the parties.

Armenia's economy should recover this year after contracting sharply in 2009, the International Monetary Fund said on Wednesday, but urged the country to tackle its bulging budget deficit. (Market News Provided by RTTNews)