Thursday, August 20 2020 17:01

ArmInfo. The national debt of Armenia, having increased by 8.4% in January-July 2020 (against growth by 0.9% a year earlier), exceeded the level of $ 7.9 billion (3.9 trillion AMD).

According to the Statistical Committee of the  Republic of Armenia, in January-July 2020, the growth of external  debt looked too modest - by 4.7% against the background of the rise  of internal debt by 22.6%, while a year earlier there was a  multidirectional dynamics - a decline in external debt by 2.2% was  accompanied by growth of internal one by 13%. As a result, by August  2020, the external debt exceeded the $ 6 billion mark (2.9 trillion  drams), while the domestic one reached $ 1.9 billion (914.2 billion  drams).

In July alone, the growth of Armenia's public debt accelerated to 3%  from the June stagnation of 0.1%, which is due to the reversal of the  dynamics of external debt from 0.2% decline to 1.2% growth with a  tangible acceleration in the growth of domestic debt from 1.1 % up to  8.5%.

In y-o-y terms (in July 2020 versus July 2019), the national debt of  Armenia sharply accelerated growth from 3.3% to 14%. This was  triggered by the reversal of the y-o-y dynamics of external debt from  0.8% decline towards 12% growth, and an imperceptible slowdown in the  growth of domestic debt from 20.6% to 20%.

In the structure of external debt, the share of the government in  January-July 2020 increased from 91.6% to 92.1% (against 90.5% a year  earlier), while the share of the Central Bank fell from 8.4% to 7.9%  (against 9, 5% a year earlier), amounting to $ 5.6 billion and $  478.6 million in absolute terms, respectively. In January-July of  this year external debt of the Government increased by 5.3%, and the  Central Bank decreased by 2.2%, while a year earlier in the same  period in both cases, a decline was recorded - by 1.7% and 6.7%,  respectively. The y-o-y dynamics (July 2020 to July 2019) of the  external debt of the Government and the Central Bank also turned out  to be multidirectional: the government external debt increased by  13.8% with the Central Bank's decline by 6.8%, repeating the trend of  a year ago, when the 0.4% growth of government debt was accompanied  by an 11% decline in Central Bank debt.  In the structure of domestic  government debt, government bonds dominate - in January-July 2020,  the share increased from 91.9% to 92.5% ($ 1.7 billion or 845.3  billion drams), with a y-o-y growth of 21.4% in absolute value. Then  the Armenian Eurobonds follow - $ 142 million or 68.9 billion drams,  the share of which decreased in January-July from 8.1% to 7.5%, with  a y-o-y decline in absolute value by 27.1%. And the portfolio of  domestic guarantees has been reset to zero since August 2019, but in  July of the same year they accounted for 0.6% or $ 9 million. In  January-July 2020 alone, domestic debt on government bonds increased  by 23.3% (against 16.7% growth a year earlier), and for Eurobonds -  by 14.5% (against 12.8% growth a year earlier). A year earlier, in  July 2019, the share of government bonds in the structure of domestic  government debt accounted for 87%, with a y-o-y increase in absolute  value by 19.1%, followed by Eurobonds - 12.4%, with a y-o-y increase  in absolute value by 34.5%, and the share guarantees was 0.6%, with  no y-o-y change.

To note, the World Bank already in its April forecast worsened  expectations for the ratio of Armenia's public debt to GDP for 2020  towards growth to 57.2% (from the actual 53.5% in 2019), against the  previously expected decline. But the WB cited this forecast, taking  into account the expected slowdown in GDP growth in Armenia in 2020,  to 1.7%. However, on June 8, the World Bank updated its forecast for  the global economic outlook amid the COVID-19 pandemic crisis,  worsening expectations for Armenia's GDP towards a 2.8% decline in  2020. Meanwhile, the IMF, in its June forecast of the prospects for  the development of the global economy in the context of COVID-19,  predicted for emerging market and developing countries in 2020 the  public debt on average at 63% of GDP with a growth trend of 10  percentage points compared to 2019.  To recall, as of January 1,  2020, the total national debt of Armenia amounted to 3.5 trillion  drams or $ 7.3 billion, in the structure of which the external debt  is 2.8 trillion drams or $ 5.8 billion, and the internal debt is  737.2 billion drams or $ 1.5 billion. The national debt of Armenia  increased by 5,8% in 2019, due to the growth of external debt by 4.6%  with an increase in domestic debt by 10.7%.