Armenia is going to graduate from the concessional funding level of the last 20 years, said IMF Resident Representative in Armenia Guillermo Tolosa at the press briefing on June 3, on the conclusion of his mission. According to him, the next program with the IMF may be the last one.

The parameters of the next program, which will succeed the 3-year EFF/ECF completed in June 1, 2013, are not yet fully elaborated and will need further negotiations.

Nevertheless, Armenia has not fully weaned itself off concessional finance: EFF/ECF has had very modest interest rates (EFF component had SDR-pegged rate, and ECF a zero rate). Within the World Bank (WB), Armenia has a mixed status, benefiting from both IBRD and IDA-funded projects (IDA imposes milder conditions and mostly lends to less sound economies). The latest WB program approved for Armenia, Disease Prevention and Control Project, will be financed through IDA as well.

Tolosa replied to the question, whether Armenia is ready to attract investment on its own and to attract investment on market terms. He noted that while the Fund still encourages the Armenian Government to go on with the reforms, this does not diminish the significance of the steps taken in the last few years. The financial authorities have conducted prudent monetary and fiscal policies, which have guided the national economy through a number of externalities and improved transparency of taxpaying.

Guillermo Tolosa told Armenia News-NEWS.am that it may be too early for Armenia to lift VAT taxation at the border for imported goods.

“There was a time when we proposed this option ourselves to simplify tax administration. We still think it is too early to step out of this, but we are ready to revise the issue when the authorities believe they are capable to collect VAT subsequently,” he said.