IMF SEES NO NEED OF ADDITIONAL SUPPORT TO ARMENIA FOR PREVENTING WORLD FINANCIAL CRISIS EFFECTS

ARKA
Nov 24, 2008

YEREVAN, November 24. /ARKA/. The International Monetary Fund
(IMF) sees no need to provide additional assistance to Armenia for
preventing the effects of the world financial crisis in the country,
IMF Deputy Managing Director Murilo Portugal told a press conference
Saturday. Yet, the IMF is ready to provide financial assistance to
the country when required, he said.

Portugal reminded that on November 17 the IMF Executive Board approved
extending SDR 9.2 mln or about US$13.6 mln to Armenia over the next
three years under Poverty Reduction and Growth Facility (PRGF) program.

"The main purpose of the program is to signal the IMF’s continued
support for Armenia’s macroeconomic policies and structural reform
agenda in the country’s transition to emerging market economy status,
thus facilitating Armenia’s integration into the world economy,"
Portugal said. Allocation of a smaller amount means that Armenia does
not need large funds anymore, he added.

Yet, Portugal pointed to certain vulnerable aspects of the Armenian
economy and the country’s major dependence on direct foreign
investments and private transfers from abroad.

As money inflow is coming mainly from Russia, further increase in
transfers is closely tied with economic development of the Russian
Federation, Portugal said adding that 70% of the direct investments=2
0and 75% of private transfers were from Russia in the first half of
the year.

According to him, possible negative processes in the Russian economy
will have negative impact on Armenia, but no downward tendency is
recorded in transfers today. Transfers are received also from other
countries, but problems may still occur, he said.

According to Armenia’s National Statistical Service, individuals
received a total of $1,205mln non-commercial funds through the
banking system of Armenia in January-September – an increase of 33.8%
or $304.2mln as compared with the level recorded in the same period
of last year.