Armenia: Crisis Recovery Support Program
Armenia - a landlocked country of 3.2 million, was growing at a rapid rate of 13.5% (in 2006-2007). Remittances amounting to $1.5 billion accounted for about 13% of the gross domestic product (GDP) in 2008, construction contributed to nearly half of the GDP growth every year during 2006-2008, and mining was a key export sector. The crisis disrupted this growth process. The economy experienced a reduction of more than 14% of GDP by the end of 2009. Government revenues dropped, while remittances and foreign direct investments both sourced from the Russian Federation reduced as the Russian economy slowed down. The Armenian dram depreciated 25% against the US dollar, a significant impact on Armenia's economy as 70% of it was dollarized. The fiscal deficit was estimated to increase from AMD40 million (1.0% of GDP) that was forecast in the original 2009 budget, to 6.5% of GDP.
The unemployment rate that had been declining steadily from a historically high level reversed its trend, thus threatening to erode the gains made by the country in reducing incidence of poverty from 55.1% in 1999 to 22.7% in 2008. The economic outlook presented enormous challenges, and the Government of Armenia faced a financing gap of $460 million. Without international support, the government would not have been able to maintain its core public expenditures, provide social protection, stage recovery, and resume growth.
This report validates the completion report's assessment of the program which aims to support the government of Armenia's crisis mitigation efforts by maintaining its core public expenditure program, meeting its social safety net spending needs and creating jobs. IED overall assessment: Successful
- Project Basic Data
- Project Description
- Evaluation of Performance and Ratings
- Other Performance Assessments
- Overall Assessment, Lessons, and Recommendations
- Other considerations and Follow-up