EU provides technical assistance to Armenia aimed at developing approaches for managing public debt

ArmInfo. The European Union  provides technical assistance to Armenia for developing approaches  for managing the state debt, Head of Operational Department at the EU  Delegation to Armenia Hoa -Bin Achemyan told journalists today. 

Within the joint work the Finance Ministry of Armenia has announced  today the midterm strategy if government debt management for  2017-2019 aimed at increasing domestic debt of the country. Deputy  Finance Minister Armen Hayrapetyan stated at the official  presentation of the Strategy that the Armenian government has already  reached certain success in state debt management, however it hopes to  introduce the best practice in this area with the help of the main  beneficiaries of the country's state debt-WB, IMF, ADB and EU. 

According to Head of Public Debt Management Department of Armenia's  Finance Ministry Arshaluys Margaryan since the first day of the  establishment of the agency for managing public debt in 1996 there  has been a need to attract experts for managing the field as Armenia  was facing such a problem for the first time. Experts from US  Department of Treasury were the first to consult the Department.  Later experts from WB, EU and IMF have also provided assistance.  However, as Margaryan noted state debt management is a process that  should be constantly improved. The regular program of technical  assistance from EU in managing governmental debt envisages attraction  of two European consultants, Margaryan informed. The program that was  launched in 2014 and will last till 2017 is aimed at revealing gaps  in the state legislation related to state debt, improving capacities  of the analytical group of the Debt Management Department of the  Finance Ministry, and proposing approaches for developing internal  debt market.

In overall, EU investments in infrastructure projects of Armenia  totaled more than 100 mln EUR within the recent 4 years. According to  Hoa-Bin Achemyan this year 17 mln EUR will be provided as budgetary  assistance. Achemyan noted that EU conducts multisided monitoring of  the efficiency of extended funds.  At the same time in order to  ensure higher efficiency of loans and grants attracted by Armenia and  further service of the debt it is necessary to improve the targeted  debt policy of the country. In this context special attention is paid  to implementation of the technical assistance program amounting to  200 thsd EUR. "This program is very important for us as it is aimed  at increasing capabilities for managing governmental debt and  ensuring additional opportunities for Armenia for unimpeded  development of the country's economy", the EU representative noted.  

To note, the aggregate state debt of Armenia will grow to 54.6% of  GDP by late 2016.  According to the Armenian Finance Ministry's  forecast, this indicator will make up 56.1% in 2017. As of October  31, Armenia's state debt totaled $5bln 607mln, or 2 665 bln AMD.  In  the state debt, the government's debt amounted to $5bln 108mln, or 2  428 bln AMD, of which the foreign debt is $4bln 45mln, or 1 923 bln  AMD, and the internal debt is $1bln 63mln, or 505 bln AMD. The  lenders are International Development Association (IDA), part of the  World Bank - 38.8% of the state debt, International Bank for  Reconstruction and Development - 15.8%, Asian Development Bank -  13.2%, International Monetary Fund - 4.8%, Eurasian Development Bank  - 3.4%, EU - 2.4%, European Investment Bank - 2.2%, International  Fund for Agricultural Development - 2.1%, OPEC Fund for International  Development - 1.4%, and the European Bank for Reconstruction and  Development - 0.6%. Among the lending countries the leaders are Japan  - 8.2% and Germany - 3.6%, while shares of the US and Russia are 0.8%  and 0.3%, respectively.