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IMF Unveils New Loan Package For Armenia

The global financial crisis has hit Armenia harder than many anticipated.

The global financial crisis has hit Armenia harder than many anticipated.

YEREVAN -- The International Monetary Fund has announced plans to provide Armenia with almost $395 million in fresh loans in the next three years, RFE/RL's Armenian Service reports.

Citing a request by Armenia, the IMF said it has also cut short its "stand-by arrangement," a 28-month lending program to Armenia launched in March 2009 to help the country cope with its worst economic crisis since the early 1990s.

The IMF had increased the promised emergency funding by more than half, to about $830 million in June 2009, because of the harsher-than-anticipated impact of the global recession on Armenia's economy.

But the IMF said in a statement that Armenia's ongoing economic recovery required a change in officials' economic needs.

"Policies supported under the Stand-By Arrangement (SBA) were instrumental in maintaining economic and financial stability and mitigating the impact of the crisis on the poor," the fund's deputy managing director, Murilo Portugal, said.

"As the economy recovers, the authorities are renewing their focus on medium-term challenges: achieving strong growth and poverty reduction, debt sustainability, and financial sector stability," he said.

The two new programs are each worth $197.4 million. The money is to be fully disbursed in several installments by July 2013. The IMF Executive Board approved the immediate release of the first tranche, $53.6 million, on June 28.

Official statistics show Armenia's Gross Domestic Product (GDP) soaring by 8.8 percent in the first five months of this year. The economy shrank by as much as 14.2 percent in 2009.