Friday, November 9 2018 14:45

ArmInfo.From 2021, the Armenian government intends to refuse external financial assistance in the form of budget loans. Acting Minister of Finance of Armenia Atom  Janjughazyan reported to the correspondent of ArmInfo. Meanwhile, earlier financial authorities announced plans to abandon this toolkit  to partially cover the budget deficit in 2019.

Back in December 2017, Armenian Deputy Minister of Finance Armen  Hayrapetyan, representing the next loan agreement, stated in the  Armenian parliament that from 2019 the Armenian government will not  attract more loans from the government and will switch to targeted  lending to strengthen the fundamentals of the economy. "That is,  there will be investments in infrastructure, in those sectors that  will form the basis for economic growth in the future", then  Hayrapetyan said.

According to Janjughazyan, the Ministry of Finance is making efforts  not to attract further loans for budget assistance. However, in 2019  and 2020, the "Medium-Term Spending Program of Armenia for 2019-2021"  provides for the attraction of these funds in order to ensure  financial stability. And, if in the current year Armenia plans to  attract $ 98.5 million through budget assistance programs, next year,  through this toolkit, $ 153.1 million will go to the republic.

As the chief financier of Armenia pointed out, today many consider  this tool to be quite attractive, since the budget support loan  differs from other types of borrowing in that it does not have a  program of specific targeted spending and is provided on concessional  terms. Nevertheless, the financial authorities of Armenia believe  that these kind of soft loans are dangerous because the country can  become completely dependent on foreign borrowing. In addition, given  the fact that at present the structure of the economy and its  "content" has changed for the better, the country should gradually  abandon third-party budget assistance.

Thus, according to the World Bank's classification, this summer  Armenia was included in the group of countries with the income level  "medium to high" (upper middle-income). This includes countries in  which the total national income per person is between $ 3,896 and $  12,055 per year. Thus, if the GDP per capita in Armenia increases to  $ 4,604 in 2019 (by the end of 2018 it will be $ 4,280), then, in  theory, it should abandon the psychology of the "chronic unemployed"  who lives on the benefits. Consequently, as indicated by Minister,  since 2021, Armenia intends to abandon loans from the budget.

 

To note, starting from 2009 to 2014, Armenia steadily increased its   state debt by an average of about $ 245 million: in 2009, as of   December 31, the state debt amounted to $ 3, 367.2 million, in 2010 -   $ 3, 805.1 million. (an increase of $ 437.9 million), in 2011 - $   4,134.7 million (with an increase of $ 329.6 million), in 2012 - $ 4,   372.1 million (an increase of $ 237.4 million), in 2013 - $ 4,588.5   million. (an increase of $ 216.5 million), in 2014 - $ 4,441.5   million. (an increase of 248.3 billion drams, and in dollar terms a  decline of $ 147 million). Already since 2015, the indicator began to   grow by leaps and bounds - by the end of 2015, reaching a bar of $   5077.7 million, while registering an increase of $ 636.2 million. The   trend continued and in 2016 - providing growth by $864.4 mln. As a   result, the figure reached $ 5,942.1 million.  By the end of 2017,   the cumulative state debt of Armenia rose to $ 6,774.6 million,   instead of the figure laid out in the "Budget-2017" figure of $ 6.512   billion.