Monday, June 7 2021 17:54
Karine Melikyan

Armenia`s public debt is approaching $ 9 billion

Armenia`s public debt is approaching $ 9 billion

ArmInfo.Armenia's public debt accelerated growth in January-April 2021 to 10.4% (from 1.4% growth a year earlier), reaching $ 8.8 billion. According to preliminary data  of the RA Ministry of Finance, published by the RA Statistical  Committee, Armenia's external debt increased by 9.8%, exceeding $ 6.7  billion, and domestic debt - by 6.8%, exceeding $ 2 billion, while a  year earlier the decline in external debt by 1.7% was accompanied by  an increase in domestic debt by 13.3%.

In April 2021 alone, the country's public debt increased by 2.3%, due  to the growth of both external debt by 0.4% and domestic debt by  4.8%. And the y-o-y growth (from April 2021 to April 2020) of public  debt by 18.9% was provoked by an increase in external debt by 17.5%  and internal debt by 19.4%. A year earlier, in April 2020, the growth  of the public debt by 1.4% result from the growth of the domestic  debt by 6.3%, while the decline in the external debt by 0.4%, and the  y-o-y growth of the public debt by 7.2% was provoked by the growth of  the external debt by 3.6% and internal by 21.4%.

In the  structure of external debt, the share of the Government by  May to 92.5% from 91.3% a year earlir, while the share of the Central  Bank fell to 7.5% from last year's 8.7%, in absolute terms amounting  $ 6.249 billion and $ 494.9 million, respectively. Moreover, in the  annual dynamics, the meager growth of the Central Bank's debt - by  only 0.02%, was accompanied by a tangible increase in the  Government's debt - by 20.2%, against the multidirectional dynamics  of a year ago, when the decline in the Central Bank debt by 8.9% was  accompanied by an increase in government debt by 6.1%.

In the structure of the domestic government debt, government bonds  dominate with an increase in the share by May 2021 to 95% from 94% a  year earlier ($ 1.9 billion or 1.003 billion drams), with a slowdown  in y- o-y growth in absolute value from 26% to 23.2%. And the  remaining 5% (against 6% a year earlier) falls on the share of  Armenian Eurobonds - $ 103.3 million or 53.8 billion drams, with the  acceleration of the y-o-y decline in absolute value from 24.6% to  26.6%.  To note, in Armenia by April 2021, the specific debt burden  per capita reached $ 2.9 thousand (against $ 2.5 thousand a year  earlier). 

Moreover, the per capita debt burden from external debt increased  from $ 1.9 thousand to $ 2.3 thousand. The degree of coverage of  external debt by gold and foreign exchange reserves by April 1, 2021  remained at the level of 45%, against the background of almost the  same y-o-ygrowth of both external debt and reserves - by 17.1% and  16.5%, respectively.  

To note, according to the March forecast of the World Bank, the  public debt of Armenia will grow to 70.8% of GDP in 2021, with a  slight decrease in 2022 to 70.6% of GDP.  And according to the April  forecast of the IMF, the gross debt of the Armenian government will  reach 69.9% of GDP in 2021 (from 62.8% of GDP in 2020), and then in  2022 it will modestly decrease to 68.8% of GDP. Moreover, the IMF  draws attention to the fact that Armenia's gross external debt, which  already in 2020 exceeded GDP to 103.5%, will continue to prevail over  GDP even more in 2021 (107%) and in 2021 (105.1%).  At the same time,  the WB forecasts the growth of Armenia's GDP in 2021 by 3.4%, with an  acceleration in 2022 to 4.3%, and the IMFforecastsa miserable growth  of Armenia's GDP in 2021 by 1%, with an acceleration in 2022 to 3. 5%  .  According to statistics, in 2020, the decline in GDP amounted to  7.4% (against 7.6% growth in 2019), the public debt increased to  67.4% of GDP (from 53.7% in 2019), and external debt - to 51 , 2% of  GDP (from 42.4% in 2019). 


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