Wednesday, June 9 2021 17:50

ArmInfo. The increase in the public debt is the price that not only Armenia, but the whole world paid, in order to mitigate the negative impact of the crisis in 2020 in some  way. This was announced on June 9 by  RA acting Minister of Finance  Atom Janjughazyan at the sitting of the Standing Committee of the  National Assembly of the Republic of Armenia on Budgetary and  Financial- Credit Issues.

Thus, the ratio of government debt to GDP by the end of 2019 was  49.9%. By the end of 2020, the level of government debt to GDP  reached 63.5%. However, this tendency is inherent not only in  Armenia, but also in all countries comparable in terms of economic  power, he said.

At the same time, according to the chief financier, the whole  question is how solvent the state is, and the economy is liquid for  timely servicing the external debt. Acting Minister of Finance  reminded that three quarters of the state debt of Armenia  is in  foreign currency. "Debt obligations in foreign currency increase the  volatility of the cost of debt service,> said the acting minister.

To recall, the average y-o-y exchange rate of the US dollar against  the Armenian dram in the State Budget of Armenia for 2020 (approved  in December 2019) was set at 476.4 drams per US dollar.

At the end of 2020, the state debt amounted to $ 7.968 billion, of  which $ 7.509 billion is government debt (external debt - $ 5.593  billion, and domestic debt - $ 1.915 billion). Having started 2021  with a public debt of $ 7.968 billion, by the end of April 2021 the  figure reached $ 8.772 billion, thus, in 4 months the debt increased  by $ 804 million.

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-y growth 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  national 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 GDP growth in Armenia in 2021 by 3.4%, with an  acceleration in 2022 to 4.3%, and the IMF forecasts a meager 1%  growth in Armenia's GDP in 2021, with an acceleration in 2022 to  3.5%.

According to statistics, in 2020, the GDP decline 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 the external debt - to 51 , 2% of GDP  (from 42.4% in 2019).