Friday, December 1 2017 17:43
Karine Melikyan

Armenia`s external debt is significantly concentrated on World Bank loans

Armenia`s external debt is significantly concentrated on World Bank loans

ArmInfo. The structure of Armenia's external debt is moderately diversified. Debt for multi-country credit programs dominates in the total volume of external debt ($ 5.1 billion by October 1, 2017) - 66.7% or $ 3.4 billion. Then, non-residents' investments in Armenian Eurobonds - 17.3% or $ 873.4 million, and debts under bilateral credit programs ($ WB: IDA - $ 1.1 billion and IBRD - $ 659.5 million), by 11% ($ 550.9 million), and the increase in the number of loans made by the World Bank amounted to 14.4% or $ 730.4 million.

Thus, the external debt of Armenia by 35.3% ($ 1.8 billion) - from the Asian Development Bank (ADB), by 8.4% ($ 425.5 million) - from the International Monetary Fund (IMF), by 4.4% ($ 221.3 million) - from the European Investment Bank (EIB). For loans from the European Bank for Reconstruction and Development (EBRD), the debt is only $ 23.4 million or 0.5% of Armenia's external debt, and from the International Fund for Agricultural Development (IFAD) - $ 66.6 million or 1.3%. Among the lenders, the largest increase in debt for the 9 months of 2017 was provided by EIB - by 40.8%, followed by the EBRD by 14.2%, and the growth in other multilateral credit programs is much more modest: ADB - 7.6%, IFAD - 4.8%, IMF - 3.3%, WB - 2.9%. The investments of non-residents in Armenian Eurobonds decreased for 9 months of this year by 3.4%

By bilateral credit programs, the largest amounts of debt are reported by JICA (Japan) and KfW (Germany) - respectively $ 238.8 million and $ 233.6 million, or 4.7% and 4.6% of Armenia's external debt. The share of loans from France is 2.2% or $ 112 million, and Russia - 1.9% or $ 96.3 million. It is for loans from Russia and France recorded the largest increase in 9 months of 2017 - by 70.7% and 41% respectively, with an increase in loans from KfW by 16.6% and a decline in loans from JICA by 0.3%.

In the annual terms (9 months of 2017 to 9 months of 2016), Armenia's external debt increased by 11%, in the structure of which the debt on multilateral credit programs grew by 12%, on bilateral - by 26.2%, and on Armenian Eurobonds, on the contrary, decreased by 5%. By bilateral credit programs, the debt to Russia has increased 7.3-fold, France's 3.1-fold, KfW-13.4%, and JICA's decrease by 13.5%. According to multilateral credit programs, the annual dynamics of Armenia's debt to investors is also up: WB by 6%, ADB by 24.2%, IMF by 1.1%, EIB by 38.5%, EBRD by 24.5% %, and the only decline, and a small one, fixed by IFAD - by 0.3%.

In the third quarter of 2017, loans were attracted for $ 106 million, repaid by $ 26.7 million, interest payments were made for $ 17.3 million. Of these indicators, the quarterly decline was fixed by repayments - by 36.3% and interest payments - by 19.5%, while attracted increased by 39.8%. As a comparison, in the II quarter 2017, on these three indicators, a significant growth was registered: attraction - 2.3 times, repayment and interest payments - 1.8-1.9 times. A year earlier, for the III quarter of 2016, attractings increased by 45.1%, with a drop in interest payments by 24.2% and repayments by 26.1%.

The debt load per capita reached $ 2.1 thousand by October 1, 2017, of which $ 1.7 thousand comes from external debt. The growth of this indicator is due to the continuing ascent of the general public debt, including external debt, in parallel with which the population is declining. So, according to the statistics on October 1, 2017 in Armenia, 2.980 million citizens live, compared with 3.270 million on the same date in 2011 (when the specific debt load per capita was $ 1.2 thousand, of which $ 1.1 thousand came from external debt).

The degree of coverage of foreign debt with gold and foreign exchange reserves declined in Jan-Sep 2017 from 45.9% to 41.3% due to a fall in reserves by 5% against the backdrop of the continuing ascent of foreign debt. By way of comparison, we note that in January-September 2016, the degree of coverage of external debt with gold and foreign exchange reserves decreased less significantly, from 41.1% to 39.7%, which was due to a more significant slowdown in the growth of reserves (from 9.1% in 9 months of 2015 to 2.6% for the 9 months of 2016), rather than the growth of external debt.

In 2016 the total public debt of Armenia grew by 15.7% to $ 5.9 billion, in particular, foreign debt - by 11.6% - to $ 4.8 billion, and domestic - by 49.7% - to $ 1.14 billion. In 2016 year the degree of coverage of external debt with gold and foreign exchange reserves increased from 41.1% to 45.9% against the backdrop of an increase in external debt for this period by 11.6%, with an increase in reserves by 22.2%. By January 1, 2017, the specific debt load per capita was $ 2 thousand, of which over $ 1.6 thousand came from external debt. In 2016, the share of national debt in Armenia's GDP grew from 48.7% to 56.6%, and only external debt in GDP - from 41.4% to 45.8%. Armenia's GDP growth slowed in 2016 to 0.2% from 3.2% in 2015.

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