 imf completes second review under standby arrangement with armenia approves request for waiver of nonobservance of performance criterion modification of performance criteria and rephasing of purchases the executive board of the international monetary fund imf has completed the second review of armenia s economic performance under a program supported by a standby arrangement sba and approved a request for a waiver of nonobservance of endseptember 2009 fiscal balance performance criterion modification of the quantitative performance criteria for enddecember 2009 to reflect the revised macroeconomic framework and rephasing of purchases to make the amounts scheduled to become available following the second and third review available upon completion of the second review these decisions enable the immediate release of sdr 3772 million about us 60 million bringing the total disbursed to sdr 30194 million about us 479 million the 28month sba was approved on march 6 2009 see press release no 968 with access augmented on june 22 2009 see press release no 9228 following the executive board s discussion on armenia mr takatoshi kato deputy managing director and acting chair stated the global crisis has continued to have a serious impact on the armenian economy while output appears to be stabilizing the fall in remittances and the collapse in the construction sector have caused a more severe economic contraction and lower fiscal revenue than anticipated in the first review the authorities have fully implemented their economic program which calls for the continuation of fiscal and monetary easing and a flexible exchange rate in light of continuing weak domestic demand the authorities will maintain fiscal easing this year with external resources taking up the revenue slack expenditure will focus on undertaking anticrisis measures increasing capital spending and protecting social spending the authorities are committed to starting fiscal consolidation in 2010 with a view to ensuring mediumterm debt sustainability the program allows for additional spending should more donor financing become available to smooth the withdrawal of fiscal stimulus an accommodative monetary policy stance remains appropriate given low inflation the move to a more flexible exchange rate has served armenia well helping the economy avoid significant overvaluation and increasing the effectiveness of monetary policy however given the remaining weaknesses in the monetary transmission mechanism targeted measures now being implemented to stimulate credit are crucial the shortterm outlook remains challenging as external conditions improve growth is expected to resume gradually in 2010 although risks remain including a slower recovery of the global economy continued reforms particularly in the areas of tax policy and tax reform administration the financial sector and the business environment will be necessary to boost the mediumterm growth potential of the economy mr kato said  