Tuesday, December 12 2017 13:59
Alexandr Avanesov

Deputy: Armenian authorities attempt to legitimize illegality of using previously attracted loans

Deputy: Armenian authorities attempt to legitimize illegality of using previously attracted loans

ArmInfo. The Armenian authorities are making an attempt to legitimize the illegality of using previously attracted loans. Mikayel Melkumyan, Vice Speaker of the National Assembly of the Republic of Armenia, stated this on December 12 from the rostrum of the National Assembly, commenting on the draft amendments to the laws on the budget system and on the state debt submitted by the government.

According to Melkumian, there are still no estimates on the effectiveness of using previously attracted loans. Moreover, without these estimates, the government decided to establish new "rules of the game" in conditions, and, under conditions under which the country was in the risk zone. International practice envisages the solution of such problems, but the same international practice obliges the governments of states to have a strategy for managing public debt, as well as forecasted trends of future developments. In the conditions of Armenia, all this is not present. No, for example, the composition and structure of public debt, as there is no diagnosis of a way out of this situation.  An analogous point of view is shared by the deputy from the Yelk faction Mine Tandilyan. According to her, the new rules of the game offered by the government of the country will not solve the problems with the manageability of the state debt, since the same government operates in the republic, the same people are from power, who for years accumulated the state debt of the country. Consequently, the MP continued, it is necessary to record that the authorities were acting ineptly without taking any action to treat the Armenian economy. In this context, the deputy does not have any confidence that after a certain period of time after the introduction of the new rules, the authorities of the republic will not again come up with new justifications for new challenges. "Of course, the rules of the game are necessary, but those events that are planned to be implemented should have been used for a long time," the deputy believes.Note that the Armenian parliament at the meeting on December 12 in the first reading started discussions on the draft amendments to the laws on the budget system and on the state debt submitted by the government of Armenia. 

According to RA Minister of Finance Vardan Aramyan, the Armenian government proposes to provide three thresholds for the level of public debt - 40%, 50% and 60% for the medium and long term. Thus, if the threshold of the national debt exceeds 40%, capital expenditures should exceed the deficit of the state budget. When the 50% norm is exceeded, the requirements are toughened and, in addition to the previous requirement, restrictions are imposed on current expenses. Thus, according to the government, it will earn a "golden rule" of debt, which provides for the possibility of financing by borrowing exclusively capital expenditures. Approaches are further tightened after the national debt exceeds 60% of GDP - current expenditures are linked to domestic revenues, especially with tax revenues.In addition, if the previously acceptable threshold of public debt of 60% was set in relation to GDP for the past year, then under the new rules it will be considered in relation to GDP for the current year. At the same time, in case of force majeure - a global natural disaster, war, in the conditions of a crisis economy, the government will be allowed to exceed 60%.  Exceeding this acceptable threshold, the law will oblige the government to submit to the National Assembly a program in which it will be shown how the Cabinet of Ministers plans to reduce the level of public debt. Under the new rule, the Ministry of Finance records that since the republic has exceeded 40% of the state debt in GDP, further borrowing can be used only for capital construction, which creates the potential that will ensure the country's growth in the near future. In addition, having established a 50% threshold, the Ministry of Finance is seeking in the future to tie hands to those politicians who, based on populist considerations, within the framework of electoral programs, decide to make a sharp increase in pensions and wages. Armenia already knows the situation when, due to external borrowing, it was financed mostly by current expenses. "Now this will be done away with, and borrowing will go to capital investments that increase the potential for economic growth.  It should be noted that by the end of 2017 the aggregate state debt of Armenia will grow to $ 6.813 billion or 60.3% of GDP from $ 5.942 billion (according to the results of 2016), instead of the budgeted by $ 6.512 billion or 57.3% of GDP in the "Budget 2017". Thus, for the year, increasing the debt burden by $ 871 million According to the budget message next year, the state debt will grow by $ 396 million to $ 7.209 billion. According to the State Debt Strategy for 2018-2020, in 2018, the debt service is planned to be $ 666 million, in 2019 - $ 710.7 million, and in 2020 - already $ 1.37 billion. (at an estimated rate of 1 US dollar / 483.83 others).  ArmInfo analysts believe that the growing external debt and high migration in Armenia increasingly deepen the specific debt burden per capita to $ 2.1 thousand by July 1, 2017, out of which $ 1.7 thousand comes from external debt. According to various estimates, by the end of 2017 this figure will be $ 2,240, which if you blindly believe the official statistics on the number of the resident population of the country (2.9 million people).


News
Iya Malkina: In Q1, the net inflow of mutual direct investments in  the EAEU amounted to $ 663.2 millionIya Malkina: In Q1, the net inflow of mutual direct investments in  the EAEU amounted to $ 663.2 million
EEC Forecast: Economic recovery in Armenia will be completed during  2022EEC Forecast: Economic recovery in Armenia will be completed during  2022
The best vacation destinations in the autumn of 2021The best vacation destinations in the autumn of 2021
Head of Central Bank of Armenia and member of EEC Board discussed  issues of Eurasian integrationHead of Central Bank of Armenia and member of EEC Board discussed  issues of Eurasian integration
"Electric Networks of Armenia" Company starts implementation of  second stage of modernization of electric grid facilities
Armenia to start developing innovative activities in cooperation with  Skolkovo FoundationArmenia to start developing innovative activities in cooperation with  Skolkovo Foundation
Tigran Khachatryan appointed Governor from Armenia in Boards of  Governors of World Bank and Asian Development BankTigran Khachatryan appointed Governor from Armenia in Boards of  Governors of World Bank and Asian Development Bank
FinRating ArmInfo: Profits of Armenian banks stagnate under the  burden of growing NPLsFinRating ArmInfo: Profits of Armenian banks stagnate under the  burden of growing NPLs
Overchuk: The unblocking all economic and transport links in the  region will increase the trade turnover between Armenia and RussiaOverchuk: The unblocking all economic and transport links in the  region will increase the trade turnover between Armenia and Russia
On October 20, REC organizes a business mission for Russian  manufacturers to ArmeniaOn October 20, REC organizes a business mission for Russian  manufacturers to Armenia
Andrey Sinyakov: We consider the completion of the second stage of the modernization project of the Agarak Copper-Molybdenum Combine as a serious anti-crisis measureAndrey Sinyakov: We consider the completion of the second stage of the modernization project of the Agarak Copper-Molybdenum Combine as a serious anti-crisis measure
Iranian entrepreneurs are interested in opening joint ventures with  Armenia in a number of areasIranian entrepreneurs are interested in opening joint ventures with  Armenia in a number of areas
Major Armenian-Russian business forum to be held in YerevanMajor Armenian-Russian business forum to be held in Yerevan
Gyumri Shirak Airport is ready to serve European budget flightsGyumri Shirak Airport is ready to serve European budget flights
Mher Grigoryan reports on certain difficulties in negotiations with  GazpromMher Grigoryan reports on certain difficulties in negotiations with  Gazprom
Standing Parliamentary Committee on Financial-Credit and Budgetary  Affairs approved Artak Manukyan`s candidacy for the position of  member of the Central Bank CouncilStanding Parliamentary Committee on Financial-Credit and Budgetary  Affairs approved Artak Manukyan`s candidacy for the position of  member of the Central Bank Council
Mher Grigoryan: In terms of the opening of railways, solutions began  to be consideredMher Grigoryan: In terms of the opening of railways, solutions began  to be considered
GeoProMining  announces  completion of the second stage of Agarak CMC  modernization project GeoProMining  announces  completion of the second stage of Agarak CMC  modernization project 
IMF sharply improved its forecast for GDP growth in Armenia for 2021 to 6.5%, but warns: IMF sharply improved its forecast for GDP growth in Armenia for 2021 to 6.5%, but warns: "Downside risks remain elevated" 
Economy Minister considers Central Bank`s updated economic forecasts  as pessimisticEconomy Minister considers Central Bank`s updated economic forecasts  as pessimistic
Armenian government to allocate about 357.5 million drams to complete  15 subvention programsArmenian government to allocate about 357.5 million drams to complete  15 subvention programs
Economy Minister on the situation with Iranian trucks: We have a  Economy Minister on the situation with Iranian trucks: We have a  "Plan B"
 Armenian accountants and auditors can grow professionally with help  of British Association of Chartered Certified Accountants Armenian accountants and auditors can grow professionally with help  of British Association of Chartered Certified Accountants
Armenian government approves the ratification of the Agreement of the  CIS countries in the fight against IT crimesArmenian government approves the ratification of the Agreement of the  CIS countries in the fight against IT crimes
Armenia and Singapore exclude double taxationArmenia and Singapore exclude double taxation
Government of Armenia ratified the agreement between the governments  of the Republic of Armenia and the Republic of Malta on the avoidance  of double taxationGovernment of Armenia ratified the agreement between the governments  of the Republic of Armenia and the Republic of Malta on the avoidance  of double taxation
The leadership of SRC of Armenia at a meeting with the head of the  FCS of the Russian Federation noted the special importance of  enhancing contactsThe leadership of SRC of Armenia at a meeting with the head of the  FCS of the Russian Federation noted the special importance of  enhancing contacts
American company Wabtec shows interest in the Armenian market American company Wabtec shows interest in the Armenian market 
Deputy Prime Minister on a possible increase in gas prices: Gazprom  insists that the amount of profit stipulated in the 2013 agreement  does not satisfy themDeputy Prime Minister on a possible increase in gas prices: Gazprom  insists that the amount of profit stipulated in the 2013 agreement  does not satisfy them
Drip irrigation. 5 questions and answers with Converse BankDrip irrigation. 5 questions and answers with Converse Bank
World Bank`s updated Groundswell report warns: Climate change could  force 216 million people to migrate within their own countries by  2050World Bank`s updated Groundswell report warns: Climate change could  force 216 million people to migrate within their own countries by  2050
Expert: The unprecedented rise in gas prices in Europe and EAEU  membership open new opportunities for ArmeniaExpert: The unprecedented rise in gas prices in Europe and EAEU  membership open new opportunities for Armenia
Central Bank of Armenia: In Jan-July 2021, the net inflow of  transfers from individuals increased by 78.5% per annumCentral Bank of Armenia: In Jan-July 2021, the net inflow of  transfers from individuals increased by 78.5% per annum
Efforts are underway to enhance seismic safety at Armenian NPPEfforts are underway to enhance seismic safety at Armenian NPP
EEC Forecast: In 2022, the negative foreign trade balance in the EAEU  will be reduced from $ 5.8 billion to $ 2.5 billion EEC Forecast: In 2022, the negative foreign trade balance in the EAEU  will be reduced from $ 5.8 billion to $ 2.5 billion 
Central Bank of Armenia: Consistent tightening of monetary conditions  has a sufficient impact on the regulation of progressive consumer  demand and on curbing of  inflationCentral Bank of Armenia: Consistent tightening of monetary conditions  has a sufficient impact on the regulation of progressive consumer  demand and on curbing of  inflation
Central Bank upgrades Armenia`s economic growth forecast for 2021 to  5.6%Central Bank upgrades Armenia`s economic growth forecast for 2021 to  5.6%
Central Bank Governor: Inflation in Armenia is more supply-drivenCentral Bank Governor: Inflation in Armenia is more supply-driven
Central Bank: Transfers from USA to Armenia are growing rapidlyCentral Bank: Transfers from USA to Armenia are growing rapidly
Armenia and Ukraine launched the improvement of trade and economic  relationsArmenia and Ukraine launched the improvement of trade and economic  relations
Official and real y-o-y inflation continues to accelerate in ArmeniaOfficial and real y-o-y inflation continues to accelerate in Armenia
Central Bank of Armenia once again raised the refinancing rate - from  7% to 7.25%Central Bank of Armenia once again raised the refinancing rate - from  7% to 7.25%
About 2 billion drams to be allocated for the installation of  photovoltaic stations in seven regions of ArmeniaAbout 2 billion drams to be allocated for the installation of  photovoltaic stations in seven regions of Armenia
"Veolia Djur" proposes to increase water tariff by 43.7 drams
Mher Grigoryan: Trade and economic relations between Armenia and  Ukraine have great potential for developmentMher Grigoryan: Trade and economic relations between Armenia and  Ukraine have great potential for development
"Become a shareholder": ACBA Bank issued its first 500.000 shares  with a total volume of 7.5 billion drams
IDBank as a sponsor of the charity concert IDBank as a sponsor of the charity concert "Armenian Rock for Children with Cancer"
As of September 10, 2021, tax collection exceeded indicators of  pre-crisis 2019 by 4.9% in ArmeniaAs of September 10, 2021, tax collection exceeded indicators of  pre-crisis 2019 by 4.9% in Armenia
The collector coin dedicated to the 30th anniversary of the Republic  of Armenia has been issued by Central BankThe collector coin dedicated to the 30th anniversary of the Republic  of Armenia has been issued by Central Bank
Minister of Finance of Armenia and Ambassador of India discussed  possible directions for development of cooperationMinister of Finance of Armenia and Ambassador of India discussed  possible directions for development of cooperation
 Construction of Construction of "Friendship Bridge" on Armenian-Georgian border is in  full swing
Armenia reduced exports of molybdenum, zinc and copper concentratesArmenia reduced exports of molybdenum, zinc and copper concentrates
Armenia increased export of all alcoholic beverages produced in  countryArmenia increased export of all alcoholic beverages produced in  country
Armenia significantly increased volume of exports and imports of  fruit and berry cropsArmenia significantly increased volume of exports and imports of  fruit and berry crops
Armenia in H1 2021 increased grape exports by 66.7% Armenia in H1 2021 increased grape exports by 66.7% 
Regular meeting of Armenian-German intergovernmental commission took  place in BerlinRegular meeting of Armenian-German intergovernmental commission took  place in Berlin
Exclusive opportunity for VISA Signature cardholders of Converse BankExclusive opportunity for VISA Signature cardholders of Converse Bank
Armenia significantly reduced sugar importsArmenia significantly reduced sugar imports
Imports of oil products to Armenia grew by 3.7% in the first half of  2021Imports of oil products to Armenia grew by 3.7% in the first half of  2021
Armenia continues to reduce imports and exports of passenger carsArmenia continues to reduce imports and exports of passenger cars
Read more


Exchange rates
22.09.2021
RUB6.65-0.03
USD484.23-0.70
EUR567.95-3.44
GBP660.20-8.23
CAD378.63-4.62
JPY44.220.12
CNY74.85-0.30
CHF524.851.73