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Armenia: IMF Approves Second Loan

Washington, 25 June 1997 (RFE/RL) -- The International Monetary Fund (IMF) has approved the second annual loan to Armenia from a multi-year program to support its economic reform plans. The first half of the $47 million loan will be available June 30.

The IMF says it approved the 1997 program even though Armenia's performance last year was "uneven." It says that inflation was cut sharply to under 6 percent, but that "relaxed" fiscal policies during the election campaign pushed the budget deficit to 9.3 percent of gross domestic product (GDP).

The IMF says Armenia needs to improve the targeting of its social safety net benefits to help the poorest and most vulnerable people and reduce pension benefits for working pensioners.

For this year, says the fund, a good economic performance is "within reach," but the situation remains "fragile." Targets agreed upon for 1997 include bringing inflation down further, cutting the budget deficit to under 7 percent of GDP, and reforming and improving the tax collection system.