Friday, June 1 2018 14:31
Karine Melikyan

Armenian public debt "frozen" at around $ 6.9 billion by May 2018

Armenian public debt "frozen" at around $ 6.9 billion by May 2018

ArmInfo. The state debt of Armenia,  demonstrating a monthly growth of 1.5% in the first quarter of 2018,  declined only slightly (by 0.3%) in April, which "delayed" it at $  6.9 bln. In the annual cut (in April 2018 by April 2017), the state  debt of Armenia increased by 14.2%.  According to preliminary data of  the RA Ministry of Finance, provided by the ArmInfo National  Statistical Service, foreign debt increased by 12.2% per annum - up  to $ 5.5 billion (2.7 trillion drams), with an annual growth of  domestic debt by 8.3% to $ 1.3 billion (644.5 billion AMD).

On a monthly basis, external debt, after rising 1.8% in the first  quarter of 2018, declined in April, and domestic debt continued to  grow, a total of 4.2% in January-April.

By way of comparison, in April 2017, by April 2016, the growth of the  external debt by 8.9% and domestic debt by 50% increased the total  state debt of Armenia by 14%. Only in January April 2017, external  debt grew by 2.1%, domestic debt - by 9.1%, which increased the total  national debt by 2.4%.  In the structure of external debt 89.1% or $  4.9 billion accounted for by the government, and the remaining 10.9%  or $ 606.1 million - by the Central Bank. And the external debt of  the government increased by 14% in April 2018 by April 2017, which is  slightly lower than the growth rate of the external debt of the  Central Bank by 15.9%, against the more modest growth rates in April  2017 by April 2016 - 8.3% and 6, respectively, 6%. Only in  January-April 2018 the government's external debt increased by 0.8%  and the same growth was recorded in the external debt of the Central  Bank (against growth of 0.7% and 3.6% a year earlier, respectively).  Moreover, the external debt of both the government and the Central  Bank, after monthly growth in the I quarter of 2018, in April showed  a decline - by 0.7% and 0.8%, respectively, while a year earlier in  January-April both the government and the Central Bank monthly  increased external debt.

In the structure of the domestic state debt, government bonds  dominate, in April 2018 the share was 87.9% ($ 1.2 billion or 567  billion AMD), with an annual growth of absolute value of 9.1%. Then  followed the Armenian Eurobonds - $ 151.3 million or 73.1 billion  AMD, which accounted for 11.3%, with an annual increase in the  absolute value of 24.7%. The rest is covered by guarantees - 0.8% ($  9 million), with an annual unchanged. Only for January-April 2018  domestic debt on government bonds increased by 9.1%, and on  eurobonds, on the contrary, fell by 2.5%. A year earlier, in April  2017, government bonds accounted for 89% of the internal state debt  structure, with an annual increase in the absolute value of 57.1%,  followed by Eurobonds - 10.2%, with an annual increase in absolute  value of 42.4%, and the share guarantees was 0.8%, with an annual  increase in the absolute value of 7.1 times.

To note, according to the World Bank's updated forecasts in May, the  share of Armenia's state debt in GDP is expected to be at 58.6%, with  a slight decrease to 58.3% in 2019. On the economic growth of  Armenia, the World Bank has improved its forecast for 2018 from the  previous 3.8% to the current 4.1%, and by 2019, the growth  expectations have been kept at 4%.

To note, Armenia's state debt increased by 15.3% to $ 6.8 billion  (3.3 trillion AMD) in 2017 due to the growth of external debt by  14.6% to $ 5.5 billion (2.7 trillion AMD) and the growth of domestic  debt by 18.2% to $ 1.3 billion (619.5 billion AMD). By way of  comparison, we note that for 2016, the growth of the external debt by  11.6% and domestic debt by 49% increased the total state debt of  Armenia by 17%.  The growing national debt and continuing migration  in Armenia have already deepened the specific debt load per capita to  $ 2.3 thousand by January 1, 2018, of which over $ 1.8 thousand comes  from external debt, against $ 2 thousand and $ 1.6 thousand,  respectively, by January 1, 2017. Taking into account the real scale  of migration, the burden of public debt per capita would be much  higher (according to statistical data as of January 1, 2018, the  population of the RA was 2.973 million, against 2.986 million a year  earlier and 3.274 million five years earlier). In 2017, the degree of  coverage of external debt with gold and foreign exchange reserves  decreased from 45.9% to 39.6% amid a significant increase in external  debt, with a meager decline in reserves. The share of national debt  in Armenia's GDP reached 58.8% by the end of 2017, against 56.6% in  2016.

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