Finance Ministry: Armenia`s state debt will increase to 54.4% of GDP totaling $5.9billion by the end of 2016

ArmInfo. By the end of 2016, the  foreign debt of Armenia will grow from 43.7% to 54.4% of GDP, Vardan  Aramyan, the newly appointed Finance Minister told journalists on  October 4. 

In his words, the foreign debt increased by $900million in 2014-2016.  By the end of the year, the government's debt will reach $4.4billion  drams, Central Bank's debt will grow to $532million. As a result, the  summary foreign state debt will make up about $5billion. 

The internal debt, the minister said, will reach $934million. "The  total state debt will reach $5.9billion by the end of the year,"  Aramyan said. The foreign debt to GDP ratio will make up about 49%,  the total debt to GDP ratio - 54.4%. 

The state debt of Armenia increased 8% in Jan-Aug 2016 to $5.5  billion (2.6 trillion drams), as both foreign and internal debt. By  preliminary data of the Finance Ministry of Armenia provided to  ArmInfo by the National Statistics Service, the foreign debt grew  5.2% for 8 months of 2016 to $4.5 billion (2.2 trillion drams) amid  23.8% growth of the domestic debt to $943 million (447.7 billion  drams). On year over year basis, foreign debt grew 9.8% and domestic  ones - 37.6%.  As a result, the state debt grew 14.6%. 

The government accounts for $4.04 billion or 90% of total foreign  debt.  The Central Bank of Armenia (CBA) borrowed the remaining $497  million or 10%.   Government's foreign debt increased 5.2% for Jan-  Aug 2016 (versus 9.1% a year ago), with that of CBA growing 4.3%  (versus 8.6% a year before). The foreign debt of the government and  CBA grew 12.2% and 4% year over year, respectively. 

Government bonds account for 91.1% of total internal state debt in  Jan- Aug 2015 (from previous 87%) or $859.4million (408 billion  drams), with the absolute indicator growing 38.7% year-over-year and  27.5% for Jan-Aug 2016 alone. Then go Armenian Eurobonds - $76.6  million or 36.4 billion drams accounting for 8.1% (from 13%) of total  internal state debt. The absolute indicator grew 4.9% y- o-y amid  21.8% decline for Jan-Aug of 2016. The guarantees account for the  remaining 0.8% or $3.3 million of total, amid zeroed commercial loans  (since Nov 2015). - Debt burden per capita in Armenia has exceeded  $1.8 thousand as of Sept 1 2016, with foreign debt accounting for  $1.5 thousand ($550 in 2009) of total, as foreign debt keeps growing  amid high rates of migration. In fact, taking into account the real  scales of migration, the foreign debt burden per capita is much  higher (by statistics, population of Armenia totaled 2.995 million  versus 3.006million a year ago and 3.266 million five years ago).   The coverage of foreign debt by gold and foreign exchange reserves  fell from 41.1% to 35.6% for first half of 2016, amid 5% growth of  the foreign debt and 11% decline of reserves.  Experts forecast  further growth of the foreign debt by 2017.  Afterwards, certain  decline is anticipated.