Armenia: By Summer, $500 Million from Russia with Love

Russia will provide a $500 million credit to Armenia by the end of May, the Regnum news agency reported March 27, citing the Armenian Ministry of Finance.

The 15-year credit agreement includes a four-year grace period after which Armenia would repay the loan at LIBOR (London Interbank Offered Rate) plus 3 percent, the RIA-Novosti news agency reported. The credit is meant to cushion the global financial crisis' impact on the Armenian economy.

Armenia's annual economic growth rate in 2008 hit a seven-year low of 6.8 percent, down from 7.8 in 2007, Armenia's National Statistics Department reported. The economy was particularly affected by problems in the real estate sector, which was a "locomotive" for growth, the Armenian finance ministry told Regnum.

Although in financial straits itself, Moscow plans to continue to dole out loans to ex-Soviet allies such as Armenia, Belarus and Kyrgyzstan. Russian Finance Minister Aleksey Kudrin said on March 25 that additional members of the Commonwealth of Independent States have asked Moscow for help, Novosti reported.