Wednesday, October 17 2018 17:51

ArmInfo. The Armenian government plans to sign a loan agreement with the Asian Development Bank (Public Efficiency and Financial Markets Program, Subprogramme 2) for $ 50 million in budget assistance. The proposal to sign the agreement  will be approved tomorrow, October 18, at a regular meeting of the  Cabinet.

According to the statement of justification for the document, the  funds will be used to finance the deficit in the framework of the RA  Law "On the State Budget for 2018". "In general, the budget deficit  is 156,915,705.5 thousand drams, and the timely receipt of credit  funds is important in terms of financing the expenses provided by the  categories of the state budget," the document says.

The total budget of the program is $ 90 million and it consists of  two subprograms for 2017 and 2018 - $ 40 million and $ 50 million,  respectively.

The program is aimed at expanding financial markets and, in  particular, includes increasing the borrower's potential for managing  public debt and fiscal risks, improving money market infrastructures  and government securities market, expanding the base of financial  instruments and strengthening the transparency of corporate finance.

Recall that the draft law on ratification of the international credit  agreement between the Republic of Armenia and the Asian Development  Bank <the Program for Public Efficiency and Financial Markets,  subprogramme 1 (current operations)> was adopted on December 13 by a  ratio of 61 votes for and 37 against. At an extraordinary meeting of  the National Assembly of Armenia on December 12, when the issue of  ratification of the loan agreement between the RA and the Asian  Development Bank was discussed, the keynote speaker - Deputy Minister  of Finance of Armenia Armen Hayrapetyan - stated that it is a  question of budget support and that the loan is already provided for  by the state budget for 2018. According to him, a loan of 40 million  dollars will ensure financial stability. The loan repayment term is  up to 2031. inclusive, with three years - on preferential terms. <The  government should make an effort to obtain a loan before the end of  2017. We will carry out loan payments in 2020 in 24 stages, "the  deputy minister said. He recalled that a budget support loan differs  from other types of loans in that it does not have a program of  specific targeted spending. This loan will cover the deficit between  expenditures and revenues to ensure fiscal stability. Deputy Minister  of Finance stressed that from 2019. The Armenian government will not  attract more budget loans and will switch to targeted loans to  strengthen the economy. "That is, there will be investments in  infrastructure, in those sectors that will form the basis for future  economic growth," said Armen Hayrapetyan.

It should be noted that in 2018, Armenia is going to attract about $  416.3 million, $ 317.7 million of them for targeted programs  (government co-financing will be $ 58.5 million), and another $ 98.5  million for budget assistance programs. By the end of 2017, the  cumulative national debt of Armenia increased to $ 6,774.6 million,  and by the end of 2018, the national debt is raised to approximately  $ 7.168 million.  (483.06 for one American dollar).

Armenia joined ADB in 2005 and is in the group of countries with  mixed (concessional and conventional) financing. Earlier, ADB Yerevan  Office Director Shane Rosenthal reported that in 2018, ADB will  continue to finance various projects, both in the private sector and  in the public sector, including infrastructure development, and will  also provide technical assistance grants.