ArmInfo. The Ministry of Finance of Armenia is not going to defend itself in connection with the published results of the audit of public debt. On February 18, head of the department Atom Janjughazyan stated this at a meeting on the Standing Committee on Financial-Credit and Budgetary Affairs of the National Assembly of the Republic of Armenia.
According to him, the Ministry is inclined to jointly search for solutions to the application of effective public debt management mechanisms, which will be in the range of $ 7.3 billion by the end of the year. For this reason, the head of the Ministry of Finance continued, interest in this area is obvious, and the issue should be gradually solved so as not to create problems, and then heroically overcome them. Systemic decisions are needed that can be made to meet expectations.
The Minister conceded that companies with state participation accumulated a certain share of debts, but it is equally important to take into account loans attracted by companies from the public regulation sector in this matter. Their debts are also a risk, since the state must either raise tariffs or assist in managing these risks. He also emphasized that the government did not attach any conceptual importance to the publication of an agency agreement between the Ministry of Finance and the Central Bank, given the neutral and independent nature of the Central Bank. However, now that a new treaty is being prepared between the parties, the government is prepared to consider its public domain. In general, as Janjughazyan noted, of the 37 risks identified as a result of studies conducted by the Audit Chamber, the state recognizes most of them.
To note, today the commission presented the results of the audit on the effectiveness of public debt management. According to the head of the Department of Methodology, Analysis and International Relations of the Audit Chamber of the Republic of Armenia Karen Arustamyan, from 2012 to 2018, the state debt of Armenia increased by 342%. There is still no open publication of the agency agreement between the Central Bank and the Ministry of Finance, although legislation requires its publication. A strategic long-term program for managing public debt is not presented to the Central Bank of the country, which could be an important help in terms of clarifying the position of the Central Bank on this issue. Nor was hedging of risks related to public debt management. The issue of managing domestic public debt remains a problem, the size of which in the share of the entire public debt for a long period of time remains at the same level of 20%. Purchased by non-residents of government bonds is only 0.6% of the total public debt. The quality of predictability of interest rate payments continues to be low. The government often assumes obligations to reduce the size of public debt, but in reality it is different. For example, in 2017- 2018 the size of domestic public debt increased by 28.5%. The issue of state guarantees remains open, for which companies attracted credit resources. Information on this issue is not available, as are data on sub- loans. Nor is an electronic database of public debt management maintained.
Earlier, ArmInfo reported that by the end of 2020, the state debt of Armenia will amount to 3.688 billion drams ($ 7.725 million) or 51.8% of GDP. At the same time, the index to GDP will decrease by about 2 percentage points. According to the results of 2020, according to the forecasts of the financial authorities of the republic, the state debt of the Republic of Armenia will grow by $ 296 million or by 329 billion drams. At the same time, external government debt will increase by 31 billion drams or by $ 63 million - from 39.3% / GDP to 42% / GDP (against the actual for 2018 2.666 billion drams or $ 6.923 million, 44.6% of GDP), and growth domestic public debt will be 111 billion drams - up to 891 billion drams (from up to $ 1,639 billion to $ 1, 871 billion) or from 11.99 GDP to 12.6% of GDP, against the actual 672 billion drams or $ 1,390mln (11.2% of GDP) according to the results of 2018.
