Thursday, February 4 2021 12:50

ArmInfo.The successful placement of Armenian sovereign Eurobonds is an assessment of international capital and investors to the fiscal policy implemented  in Armenia. RA Minister of Finance Atom Janjugazyan stated this at a  government meeting on February 4.  

According to him, the attraction  of additional financial resources will lead to some growth in the  country's public debt. Without any doubts, continued the head of the  Ministry of Finance, the growth of public debt in absolute terms is  seen as a negative phenomenon, but you should have in view of the  high level of public debt image, which is the result of fiscal  policy. In other words, the minister continued, a unit (state),  having a state budget deficit, cannot think about reducing the state  debt. The deficit is repaid, among other things, by attracting  borrowed funds. The only case when we can talk about the possibility  of reducing the national debt is the presence of a zero deficit  indicator, for this there was no, no, and, in all likelihood, there  will not be. Consequently, Atom Janjugazyan believes, as long as  there is a deficit, an increase in the national debt is inevitable.  But in this matter, it is very important to control the ratio of the  national debt to the country's GDP. True, this question is just one  of the integral indicators. Together with numerous other indicators,  investors assess all other risks. As of the end of 2019, Armenia was  viewed as a state with a low burden of public debt, but this does not  mean getting into new risks. The investor, first of all, assesses the  state's solvency.

Atom Janjughazyan noted that the placement of Eurobonds is only one  of the sources of income, but there are others. In particular, this  year, 370 billion drams are to be placed on the domestic market, of  which 210 billion drams will be allocated to finance various  programs, and the remaining 160 billion drams - to redeem previously  placed government bonds.

There are also programs to attract loans from the World Bank, the  Asian Development Bank, and other international financial  institutions for the implementation of targeted programs, as well as  for budget assistance in the amount of about 50 billion drams.

The minister also said that of the $ 750 million raised as a result  of the placement of Eurobonds, $ 250 million will be directed to a  stabilization deposit account, from where, if necessary, possible  problems that may arise during the repayment of the state debt will  be financed.

Note that as of December 1, 2020, Armenia's public debt amounted to $  7.9 billion, having increased by 8.2% compared to the previous year.  At the same time, the size of the external state debt amounted to $ 6  billion (growth of 3.4%), domestic - $ 1.9 billion (growth of 26.7%,  mainly due to the dram government bonds).