Mr. Masood Ahmed, Director of the IMF’s Middle East and Central Asia Department visited Armenia on June 28-July 1, for meetings with the authorities and other stakeholders. At the conclusion of his visit, Mr. Ahmed made the following statement:

“It has been a great pleasure to visit Armenia and to meet President Sargsyan, Prime Minister Abrahamyan, other senior officials, and representatives of the private sector, civil society, the international community, and students. We exchanged views on the impacts of the slowdown in Russia, lower remittances and copper prices, and sluggish growth in Europe and globally. We focused on how to improve growth and employment prospects over the medium term.

“Conditions and prospects in the Caucasus and Central Asia region are challenging, with an impact on Armenia. Growth is likely to remain at a moderate level over the next several years, which will make it challenging to create jobs and improve living standards. While Armenia has a track record of sound macroeconomic management, macroeconomic buffers are lower now, and higher levels of external debt and financial dollarization make the country more sensitive to adverse external economic developments. On the positive side, an important economic transformation has been underway over the past five years, with agriculture, mining, tourism, and services receiving investment and contributing to growth.

“Decisive action is needed to support higher growth going forward. While macroeconomic management has been good, efforts should now be made to increase growth-enhancing capital and social expenditures and reduce public debt. Further progress in tax administration and in improving the efficiency and equity of the tax system would provide additional resources to meet these objectives. Further bolstering Armenia’s foreign exchange reserves, maintaining a strong and resilient banking sector, and addressing weaknesses in the energy sector will also be important.

“These actions should be complemented by decisive implementation of bold structural reforms. Continued efforts are needed to improve the business environment, making the economy more open, competitive, and integrated regionally and globally. The IMF is aware that conditions are difficult and implementing these actions is not easy. We have had fruitful cooperation with Armenia over the past two decades and will continue our commitment to help Armenia and its people. I am grateful to the authorities for their hospitality and constructive dialogue during my visit.”