TBILISI (Reuters) - The International Monetary Fund has approved a $248.2 million three-year stand-by precautionary arrangement for Armenia to support structural reforms and improve the business environment.
Armenian authorities do not intend to draw the funds unless shocks generate balance of payments needs, the IMF said in a press release.
The South Caucasus country of 3.2 million people depends heavily on aid and investment from former imperial master Russia, whose economic downturn has hit Armenian exports as well as remittances from Armenians working there in recent years.
The economy expanded 5.2% year-on-year in 2018 down from 7.5% in 2017, the result of a slowdown in economies of Armenia's trading partners and underperformance in the agriculture and mining sectors.
"Armenia has continued to make progress in recent years in maintaining macroeconomic and financial stability and in implementing structural reforms to promote growth," Mitsuhiro Furusawa, the Fund's deputy managing director, said.
"Continuing reform efforts are needed to support a more balanced and inclusive growth, by reducing imbalances, improving the business climate and strengthening governance, and advancing measures to reduce poverty and unemployment."
The government expects 4.9% growth in 2019. The Fund's economic growth projection for this year is 4.6%.
(Reporting by Margarita Antidze; editing by Ed Osmond)