Tuesday, July 7 2020 16:33
Karine Melikyan

Armenian national debt continued growth in May 2020 amid resumed  growth of external debt 

Armenian national debt continued growth in May 2020 amid resumed  growth of external debt 

ArmInfo. The state debt of Armenia  in January-May 2020 increased by 1.5% (against growth by 0.03% a year  earlier), amounting to $ 7.433 billion (3.597 trillion drams).   According to the RA Statistical Committee, in January-May 2020,  external debt decreased by 1.2% to $ 5.717 billion (2.767 trillion  drams), and domestic debt grew by 11.6% to $ 1.716 billion (830.5  billion drams), repeating last year's multidirectional dynamics (in  January-May 2019, the decline in external debt by 1.3% was  accompanied by an increase in domestic debt by 5.3%).

In May alone, the growth of the state debt of Armenia slowed down  slightly - up to 0.4% from April 1.6%, which is due to the resumption  of growth of external debt - by 0.2% after the April 0.3% decline  with a slowdown in domestic debt growth to 0, 8% from April 8.6%.

In y-o-y terms (in May 2020 versus May 2019), the state debt of  Armenia sharply accelerated growth from 2.5% to 7.3%. This was  triggered by a reversal in the y-o-y dynamics of external debt from a  0.6% decline to a 4.7% increase, and a continuing acceleration in the  growth rate of domestic debt from 16.1% to 17.3%.

In January-May 2020, the Government's share in the structure of  external debt decreased from 91.6% to 91.3% (against 90% a year  earlier), while the Central Bank's share increased from 8.4% to 8.7%  (against 10% a year earlier), amounting to $ 5.2 billion and $ 496.3  million in absolute terms, respectively. For January-May this year  the external debt of the Government decreased by 1.5%, and the  Central Bank's share increased by 1.4%, while a year earlier in the  same period in both cases there was an almost identical decline - by  1.3% and 1%, respectively. The y-o-y dynamics (May 2020 against May  2019) of the external debt of the Government and the Central Bank  also turned out to be multidirectional: government external debt  increased by 6.2% while the Central Bank's debt decreased by 8.9%,  with the same trend a year ago, when the 0.4% growth government debt  was accompanied by an 8.7% decline in the Central Bank's debt.

In the structure of the domestic public debt, government bonds  dominate - in January-May 2020, the share decreased from 91.9% to  91.8% ($ 1.6 billion or 762.6 billion drams), with a y-o-y increase  in absolute value by 25.3%. This is followed by the Armenian  Eurobonds - $ 140.4 million or AMD 67.9 billion, the share of which  increased from 8.1% to 8.2% in January-May, with a y-o-y decline in  absolute value by 28.1%. And the portfolio of internal guarantees was  reset to zero since August 2019, but in May of that year they  accounted for 0.6% or $ 9 million. In January-May 2020 alone domestic  debt on government bonds grew by 11.5% (against 4.1% growth a year  earlier), and on Eurobonds - by 13.2% (against 13.1% growth a year  earlier). A year earlier, in May 2019, government bonds accounted for  86% of the structure of the domestic public debt, with y-o-y growth  of the absolute value by 14.1%, followed by Eurobonds - 13.4%, with  the y-o-y growth of the absolute value by 31.6%, and the share of  guarantees amounted to 0.6%, with no changes over year.

It should be noted that the World Bank in its April forecast worsened  expectations on the ratio of the state debt of Armenia to GDP for  2020 upward to 57.2% (from the actual 53.5% in 2019), against the  previously expected decline. But this WB forecast resulted in the  expected slowdown in Armenia's GDP growth in 2020 to 1.7%. However,  on June 8, the World Bank updated its forecast of global economic  prospects in the context of the crisis of the COVID-19 pandemic,  worsening expectations for Armenia's GDP towards a 2.8% decline in  2020.

To recall, by January 1, 2020, the total state debt of Armenia  amounted to 3.5 trillion drams or $ 7.3 billion, in the structure of  which the external debt was 2.8 trillion drams or $ 5.8 billion, and  the domestic debt was 737.2 billion drams or $ 1.5 billion. Armenia's  public debt increased by 58% in 2019 due to an increase in external  debt by 4.6% with an increase in domestic debt by 10.7%.

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Government Bonds

Issue volume

10 billion

Volume of T-bills for placement

200 million

Volume of submitted competitive applications

200 million

Volume of satisfied bids

200 million

Yield at cut-off price

 5.8314%

Maximum yield

 5.8314%

Мinimum yield

 5.8314%

Weighted average yield

 5.8314%

Number of participants

2

The maturity date of T-bills

03.02.2020

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Средневзв. Цена

482,00

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Цена откр.

482,00

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Ср/взв. Цена

482,00

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200 000

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96 400 000