Armenia: Revenues Fall 46 Percent Short of Target

Armenian government revenues in January and February 2009 fell 46 percent short of the country's target, the Armenian Ministry of Finance has announced.

The government brought in 84.6 billion drams, or just over $231 million, during the first two months of 2009. To tighten its belt, Armenia will spend half of the amount projected for expenditure for these two months, or 98.9 billion drams (about $270.14 million), the ministry said. Compared to the same period in 2008, budgetary revenues fell by 14.6 percent. The budget contracted largely because of a 17.5 percent drop in tax revenue, the A1plus news agency reported.

The International Monetary Fund has attributed the lower revenue to a fall in international commodity prices. Armenia's key export sector is mining. Foreign remittances and foreign direct investment have also contracted as the economic situation in Russia has worsened.

To pump up Armenia's ailing economy, the International Monetary Fund has agreed to a $540 million loan, while the World Bank has promised $525 million over the course of four years. Moscow, for its part, has pledged another $500 million "stabilization credit" to Armenia, its main ally in the South Caucasus region.