ArmInfo. Armenia makes changes in the regulation of public debt. Amendments to the laws "On the Budget System" and "On the State Debt" were adopted at the RA National Assembly on December 20 in the second and final reading.
According to RA Minister of Finance Vardan Aramyan, the second reading received 18 proposals from NA deputy Khosrov Harutyunyan, most of which were accepted by the authors of the document. According to the package, it is proposed to provide three thresholds for the level of public debt - 40%, 50% and 60% for the medium and long term. Thus, if the threshold of the national debt exceeds 40%, capital expenditures should not exceed the deficit of the state budget. When the 50% norm is exceeded, the requirements become tougher, and, in addition to the previous requirement, there are restrictions on current expenses.
Thus, according to the government, it will earn a "golden rule" of debt, which provides for the possibility of financing by borrowing exclusively capital expenditures. Approaches are further tightened after the national debt exceeds 60% of GDP - current expenditures are linked to domestic revenues, especially with tax revenues. In addition, if the previously acceptable threshold of public debt of 60% was set in relation to GDP for the past year, then under the new rules it will be considered in relation to GDP for the current year. At the same time, in case of force majeure - a global natural disaster, war, in the conditions of a crisis economy, the government will be allowed to exceed 60%. Exceeding this acceptable threshold, the law will oblige the government to submit to the National Assembly a program in which it will be shown how the Cabinet of Ministers plans to reduce the level of public debt. Under the new rule, the Ministry of Finance records that since the republic has exceeded 40% of the state debt in GDP, further borrowing can be used only for capital construction, which creates the potential that will ensure the country's growth in the near future.
It should be noted that by the end of 2017 the aggregate state debt of Armenia will grow to $ 6.813 billion or 60.3% of GDP from $ 5.942 billion (according to the results of 2016), instead of the planned in the "Budget-2017" indicator of $ 6.512 billion or 57.3% of GDP. Thus, for the year, increasing the debt burden by $ 871 million According to the budget message next year, the state debt will grow by $ 396 million to $ 7.209 billion. According to the State Debt Strategy for 2018-2020, in 2018, the debt service is planned to be $ 666 million, in 2019 - $ 710.7 million, and in 2020 - already $ 1.37 billion. (at an estimated rate of 1 US dollar / 483.83 others). ArmInfo analysts believe that the growing external debt and high migration in Armenia increasingly deepen the specific debt burden per capita to $ 2.1 thousand by July 1, 2017, out of which $ 1.7 thousand comes from external debt. According to various estimates, by the end of 2017 this figure will be $ 2,240, which if you blindly believe the official statistics on the number of the resident population of the country (2.9 million people).