YEREVAN, October 6. /ARKA/. International Monetary Fund is happy about the results of its bailout program in Armenia.

The IMF said in its document on the program implementation that despite deterioration of economic situation in Armenia amid the global recession, the program implementation inspired hope that things would be put right soon.

The bailout loan of $544 million was approved by the IMF executive board in March 2009. In June 2009, the board decided to enlarge financial support for Armenia to $823 million (SDR 533.6 million) or580% of Armenia’s quota.

The IMF lends this money to Armenia for five years with a grace period of three years and three months at SDR interest rate that is1.5% now.

The IMF said in the document placed on its official website that the crisis has stricken hard at Armenia putting an end to the vigorous economic development the country has enjoyed since 2000.

The IMF said that the inflow of money transfers in Armenia dwindled a great deal and export volumes shrank because of the global economic crisis and following downturn in Russia. Double-digit GDP growth was followed by adverse indicators, unemployment grew and stress surged up in the corporate sector, the IMF reports.

Initially, Armenian authorities resisted pressures on exchange rates and tried to curb devaluation of the national currency. These efforts were accompanied precipitous reduction of international reserves in late 2008 and early 2009.

Immediately after the return to the floating rate policy Armenian currency weakened about 20%, but later exchange rates were stable thanks to limited interventions on currency market.

The IMF stresses that the country has managed to retain financial stability and not a single bank has faced grave problems. However, despite the results achieved, economic difficulties will still remain for a short period of time.

Downturn in Russia and other trade partners to Armenia is impacting the latter. Therefore Armenia is believed to face 15-percent or worse economic decline, since reduction in direct foreign investments lessens domestic demand, and export volumes reduce because of lowering world demand.

IMF experts think that Armenia’s banking sector is properly capitalized, but economic decline will impact credit risk degree. Now this impact is seen in the growing numbers of non-working credits.

Pressures on payment balance are expected to remain under adequacy of international reserves. Ongoing support of international donors for Armenia will be important for mitigating the pressures mentioned above and curbing the economic decline.

The IMF says that in such a complicated situation, the poor will be badly in need of support from Armenian government and international donors.

The International Monetary Fund thinks Armenia has sufficient room for resisting the above-mentioned challenges, and the government’s policy along with financial assistance from the IMF and other international partners will help the country to go through this trial and recover with a new economic growth, growing incomes, rising occupation rate and reducing poverty. --0--