Karen Chshmarityan thinks $300mln loan of EDB will not create additional debt burden for Armenia

He said that the foreign debt of Armenia is calculated by the Armenian Ministry of Finance. The total amount of the foreign debt and the possible risks are estimated with due regard for the efficiency of economy and, consequently, its ability to service the debt. In this particular case, the minister said, the EDB loan with its 10-year grace period will not affect the budget and will not create an additional debt burden.  "It depends on us how efficiently we can service the foreign debt," he said. In this light, when replying to the remarks that the foreign debt-to-GDP ratio is growing and the industry fails to develop, Chshmarityan noted that the industry growth in Armenia demonstrates one of the best indices in the world. "Certainly, we would like to come across no such problems, but there are external challenges. To neutralize these challenges, all countries, even the progressive ones, have to increase their debt 

burden. At the same time, the economy minister assured the media that Armenia will not follow in Greece's footsteps.

 

To recall, on November 5 the Armenian Government approved the draft agreement on provision of EDB $300 million privileged and long-term loan to Armenia through the Eurasian Fund for Stabilisation and Development. Armenian Minister of Finance Gagik Khachatryan pointed out that the loan will fund the expenditure item of the Armenian 

state budget. The redemption period will be 20 years, with 10 years being the grace period, and the interest rate is 2.1% per annum. The loan will be provided in three tranches ($100 million each) no later than 31 March 2018. The loan program aims to enhance the financial stability of the energy system and the efficiency of the public 

finance management, as well as to ensure relevant conditions for development of the business environment.