Thursday, November 22 2018 16:26

ArmInfo. The Armenian Parliament approved a loan agreement with the Asian Development Bank (ADB) ''Public Efficiency and Financial Markets Program, subprogram 2'' for $ 50 million in budget assistance. The proposal to sign the  agreement will be approved tomorrow, October 18, at the 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.

To recall, 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 ''in favor'' 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, RA Deputy  Finance Minister Armen Hayrapetyan, said that it was a budgetary  assistance and that the loan was 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.

To note,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.