Armenia`s state debt to increase by more than half a billion dollars  in 2019

ArmInfo. In 2019, Armenia will increase public debt by $ 512 million, of which $ 21 million through the Central Bank. Meanwhile, in the current fiscal year, Armenia  planned to raise funds in the amount of $ 446 million, of which $ 31  million through the Central Bank.

As stated by the acting Armenian Minister of Finance Atom Janjughazyan, presenting foreign borrowings for the next year, the new government is not afraid of criticism. "If  we have a state budget with a deficit, what source do we consider to  cover the deficit? Loans," Janjughazyan said.

Thus, in 2019, the state budget deficit of Armenia will make about  151.6 billion drams (about $ 313 million) or 2.2% of GDP, against  156.9 billion drams (about $ 325 million) or 2.7 % of GDP set in  2018.  The deficit will be financed from external sources - in the  amount of 97.5 billion drams (about $ 202 million), and 54.1 billion  drams (about $ 112 million) at the expense of domestic funds.   According to Artur Hambardzumyan, a representative of the State Debt  Management Department of the Ministry of Finance, next year foreign  borrowings in the amount of about $ 152.1 million out of the provided  $ 490 million will be directed to budget assistance (74 million  drams). Another $ 337.6 million or 164.2 billion drams will be  attracted to targeted programs. $ 292.6 million will be spent on  servicing loans, of which $ 175 million will be used to pay off the  principal amount of external debt and $ 117.6 million to interest  rates on loans.

The largest loan of $ 343 million is planned to be received from  Russia, of which $ 192.9 million has been approved. $ 53.1 million is  expected from the Asian Development Bank, $ 50.4 million will be  raised from the International Bank for Reconstruction and  Development, the International Development Association will provide $  9.7 million, the European Investment Bank - $ 9.4 million, the German  Bank - $ 7.5 million, the European Bank of Reconstruction and  Development - $ 7.3 million, France will provide - $ 3.3 million, the  Eurasian Bank - $ 3 million, the International Fund for the  Agricultural Development - $ 2.8 million and the OPEC Fund for  International Development - $ 0.2 million.

In total, $ 152 million will be received for budgetary assistance,  the energy sector will receive $ 133 million, of which $ 104.8  million will be allocated to the program to restore the Armenian NPP.  It is noteworthy that $ 103 million will be attracted to various  programs of reforming the public sector, and only $ 45 million for  road construction. $ 32 million will be attracted for educational  sector, solving problems in the field of village and irrigation $ 17  million, water supply - $ 5 million and garbage collection - $ 3  million. Acting Finance Minister Atom Janjughazyan told reporters  that the government is ready for possible criticism of its foreign  debt. Constructive criticism, he believes, can be a kind of signal  for the Ministry of Finance to "correct the mistakes made."  Janjughazyan does not agree with the opinion that a country planning  a budget with deficit can do without external borrowing, even if the  oligarchs are "seriously shaken". "We are not going to use tax  revenues to pay off the debt ", the acting Minister of Finance said.  According to Janjughazyan, there is no need to concentrate on the  nominal increase in public debt, which will continue to grow.  According to him, it's worth thinking about repayment of debt, and  how to reduce the significance of debt for the country's economy.  "That is, we must come to ensure that our economy grows faster than  external debt," Janjughagazyan said.

To note, next year, as a result of fiscal policy, the level of public  debt will be stabilized. Thus, it is expected that the ratio of  public debt to GDP will decrease from 55% predicted by the end of  2018 to 53.43% of GDP, and the ratio of government debt to GDP by the  end of 2018 will be reduced from 53.4% to 49.7% .  In general, by the  end of 2019, the state debt will grow to $ 7.468 billion with the  expected for the current year of about $ 7.2 billion, or $ 7.053  million revised by the Ministry of Finance or 55% of GDP, and the  government debt will make $ 6 billion 844.5 million (the estimated  exchange rate of the Armenian dram to the dollar is $ 1 = 483.38  drams).