ArmInfo. Armenia's state debt has reached a critical level, Bagrat Asatryan, the former head of the Central Bank of Armenia, said at the International Economic Congress in Yerevan, Thursday.
The expert explains that the budget expenditures on the debt service grow. "We are approaching 10% level," he said adding that growing state debt hinders economic growth. Calling Armenia as a country record-breaker in terns of monopolies, the expert said a bunch of problems have accumulated since the financial crisis of 2009 i.e. falling economic growth rate, instability of the financial system, reduction of investments and transfers, reduction of the GDP per capita, the low employment level and high poverty rate. "In the 21st century, 30% of Armenia's residents think of making the pot boil. The poverty rate in Armenia is the highest in the region. For the first time in history we are in such situation," he said.
In response to ArmInfo's question about the major reason of the negative phenomena in economy, Bagrat Asatryan said: "Corruption has killed SME, investment opportunities of the country, and ensure sustainable growth for the authorities' share in the business segment. The parliament is based on corruption, as 90% of shadow economy is in the hands of the government officials," he said urging an open dialogue of the authorities and the people.
As for the government program, Bagrat Asatryan thinks the budget program does not meet the government program and does not ensure proper life for the citizens.
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%.
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 2015, the state debt increased by 19% versus 10.5% growth in 2014.