ArmInfo. Repayment and servicing of the government debt of Armenia in 2020 will cost the state treasury $ 1.355 billion. At the same time, as expected, the nominal GDP in the conditions of 4.9% of economic growth will increase by approximately 529 billion drams - from 6.566.5 billion drams expected by the end of 2019 to 7.095.1 billion drams or about $ 14.9 billion (the calculated exchange rate of the Armenian dram to the dollar is 476.17 drams) laid down in the draft Law on the state budget of the Republic of 2020.
. Thus, according to forecasts laid down in the basis of the document, the state debt of Armenia by December 31, 2019 will amount to 3.538 trillion drams ($ 7.430 billion) or 53.9% of GDP. At the end of 2020, the indicator will reach 3.705 trillion drams ($ 7.780 billion), or 52.2% of GDP.
At the same time, by December 31, 2020, government debt will amount to 3.490 trillion drams ($ 7.330 billion) or 49.2% of GDP, thus decreasing by 1.1 percentage points from the expected by the end of 2019 3.305 trillion drams ($ 6.940 billion) or 50.3% of GDP. According to the results of 2020, the debt of the Central Bank will amount to 214 billion drams ($ 450 million) or 3% of GDP, against 233 billion drams ($ 490 million) or 3.5 GDP expected by the end of this year. At the same time, the Armenian financial authorities plan to increase domestic debt from 780 billion drams or $ 1,639mln (11.9% of GDP) in 2019 to 12.9% of GDP or 916 billion drams, $ 1,923mln (against the actual for 2018 672 billion or $ 1,390 million, 11.2% of GDP).
And, if from 2009 to 2016 on average 4.2% of state treasury expenses were directed to pay interest payments, in 2017 the figure increased to 8.1%. In 2018, interest was paid for interest payments 139 billion drams (instead of the actual ones for the year 2017, 122.1 billion drams), namely 75 billion drams for external debt and 64 billion drams for domestic debt. In 2019, according to the indicators laid down in the approved budget, Armenia will direct about 356.9 billion drams ($ 733 million), or 9.6% of the state treasury expenses, to repay and service the government debt. In particular, out of 356.9 billion drams, 198.9 billion drams were planned to be allocated for paying off the main amount of the debt (85.2 billion drams for external debt and 113.7 billion drams for domestic debt), and 158 billion drams for paying interest payments.
As a result, according to the document, the repayment and servicing of the government debt of Armenia in the next year will require 453.9 billion drams (about 953.5 million). In particular, 284.7 billion drams (about $ 598 million) of them will be allocated to pay off the main amount of the debt (123.4 billion drams will be used to pay off the domestic debt, and 161.3 billion drams - on the external debt). About 9% of state treasury expenses or 2.4% of GDP in the amount of 169.2 billion drams ($ 355.48 million) will be allocated for the payment of interest payments (85.6 billion drams will be used to pay interest payments on the domestic debt and 83.6 billion drams - external).
As a comparison, we note that in 2020 the budget allocations for education and science will amount to about 160 billion drams, healthcare will receive 110 billion drams. Armenia should also send about $ 402 million to repay the first tranche of Eurobonds, which was scheduled for September 30, 2020. The financial authorities have already decided the issue by issuing the third tranche of Armenian sovereign securities. On September 19, Armenia announced the release of 10-year-old Eurobonds in the amount of $ 500 million, the organizer of the issue start bookbuilding in the amount of $ 500 million with an initial yield of 4.625% per annum. But a significant prevalence of demand over supply - by more than 5 fold - led to a decrease in the yield rate to 4.2% per annum, and the coupon rate was 3.95%.
The main underwriters were J.P. Morgan Securities plc and City bank. The RA financial authorities have already bought out Armenian liabilities on the first tranche of $ 402 with these funds, and sent $ 98 million to the Stabilization Deposit Fund. According to the results of 2020, according to the source, the World Bank (WB) represented by the International Development Association (IDA) remains the largest external creditors of Armenia, which accounts for 39.4% of external loans and another member of the WB group - the International Bank for Reconstruction and development (IBRD). The list of large creditors also includes the Asian Development Bank (ADB) with 19%, the Eurasian Development Bank (EDB) - 7.3% and the European Investment Bank with 3.5%. Among the countries of creditors Russia is the leader - 10.5%, Japan - 4.8%, Germany - 5.8% and France - 2.9%, followed by China and the USA - in the amount of 0.5% and 0.3% respectively.