Friday, April 14 2017 20:34
Karine Melikyan

Armenian Finance Ministry does not worry about exceeding national debt threshold of  52% of GDP

Armenian Finance Ministry does not worry about exceeding national debt threshold of  52% of GDP

ArmInfo. The Armenian Finance Ministry does not see a serious cause for concern, as in 2016 the country's national debt level amounted to 52.3% of GDP, having increased over the previous three years from 38.8%.

As Arshaluys Margaryan, the Head of the Department for Management of External and Internal State Debt of the Armenian Ministry of Finance, said at a press conference on April 14, the share of budget expenditures on the external debt service line is about 9%, although they were 1.5-2% three years ago. But this figure, in his opinion, is too far from "formidable" and extremely heavy 15-20%. "Our debt is high, but from the point of view of its repayment terms it is quite "soft", so I do not see any threat. The only way to solve the problem is to achieve high economic growth rates: now it is already visible and it is desirable to stick to the rate of 6% and above , which we received in the first months of the year. The risks of our portfolio are monitored and adequately assessed for 3-5 years ahead," Margaryan said, expressing confidence that the country will not have to declare the world its insolvency - default. To noted, the Ministry of Finance, as an agent of the government, issues short-term, mid-term and long-term state bonds.  According to the results of 2016, there were in circulation 508.3 billion AMD of state bonds, of which long-term (LTSB) - 214.7 billion (42.2% on the market), medium-term (MDTS) - 212.7 billion (41.8%), short-term (STSB) - 78.8 billion (15.5%), and savings - 2.1 million AMD (0.4%). The average yield of state bonds following the results of 2016 was formed at the level of 13.1542%, with LTSB - 15.0118%, MTSB - 13.2241%, STSB - 7.8912%. The average maturity of the domestic public debt rose by the end of 2016 to 2,208 days from 2,065 days a year earlier, jumping to 2,440 days by April 2017. Due to state bonds it was planned to finance the deficit in 2005 by 53.8 billion AMD, but the actual figure for the year was 3.2 times higher - 171.01 billion AMD, while a year earlier, in 2015 the actual figure exceeded the planned figure more significantly - in 5 times - 15.6 billion against 3 billion AMD. The volume of circulating government bonds increased by 58.4% in 2016, in particular short-term almost 4 times, mid-term by 38.2%, long-term by 48.7%. With the average yield on state bonds decreased from 13.9917%, mainly due to a significant decline in the yield of short-term - from 12.2579%, with a slight decline in long-term and mid- term profitability - from 15.0142% and 13.2810% respectively. By April 1, 2017, the volume of circulating state bonds reached 511.1 billion AMD, of which LTSB - 237.7 billion (46.5% on the market), MTSB - 226.2 billion (44.3%), STSB - 44.9 billion (8.8%) , and the average yield of state bonds was formed at the level of 13.4137%, with LTSB - 14.8428%, MDSB - 13.0548%, STSB - 7.6529%.

According to the state budget of the Republic of Armenia, economic growth in 2017 is planned at 3.2%, nominal GDP growth is about 5%, with a deflation index of 1.7% (against 2.4% in 2016), a deficit of 150.1 billion AMD. The revenue part of the state budget of Armenia in 2017 will increase to 1.210 trillion AMD, spending - reduce to 1.360 trillion, the ratio of income/GDP will reach 22.4% from 21.8% in 2016.  According to the Armenian Ministry of Finance, Armenia's state debt for the first quarter of 2017 increased from $ 5.9 billion to $ 5.99 billion, the state's external debt increased from $ 4.3 billion to $ 4.31 billion, and the state's internal debt from $ 1.1 billion to $ 1.2 billion.

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Government Bonds

Issue volume

10 billion

Volume of T-bills for placement

200 million

Volume of submitted competitive applications

200 million

Volume of satisfied bids

200 million

Yield at cut-off price

 5.8314%

Maximum yield

 5.8314%

Мinimum yield

 5.8314%

Weighted average yield

 5.8314%

Number of participants

2

The maturity date of T-bills

03.02.2020

ArmEx

 

СПРОС (Покупка)

USD

Средневзв. Цена

482,00

ПРЕДЛОЖЕНИЕ (Продажа)

  USD

Средневзв. Цена

-

СДЕЛКИ

USD

Цена откр.

482,00

Цена закр.

482,00

Мин. Цена

482,00

Макс. Цена

482,00

Ср/взв. Цена

482,00

-0.16

Кол-во сделок

1

Объем (инвал.)

200 000

0бъем (драм)

96 400 000