ArmInfo.The Armenian economy has not yet been faced with the consequences of the defeat in the 44-day war. The trends that we observe in the economy today are results of the consequences of the coronavirus pandemic in the world. Former Head of the Central Bank of Armenia, candidate for MP of the proportional list of the Armenian National Congress Party Bagrat Asatryan expressed this opinion at a press conference.
"To our great regret, we still have to face the consequences of last year's war. Almost 8 months have passed since the end of the war, but the authorities have not yet taken the programmatic steps and measures necessary to overcome the economic consequences of this tragedy. There was a significant economic downturn in Armenia last year, and against the background of the available economic indicators, the current state of the economy as a whole can be characterized as a crisis," the economist noted.
In this light, Asatryan stressed that the state of the economy is overloaded with external debt. According to him, the external debt is repeatedly and consistently increasing. In this light, he noted that Armenia has summed up the fiscal year with an almost 64% ratio between external debt and GDP. Meanwhile, the latter is already a violation of the law, which does not allow exceeding the threshold of 60%. Moreover, following this, the relevant fiscal and other state bodies have not published a single conclusion, not to mention the publication of their further intentions.
Acting Minister of Finance Atom Janjughazyan, during the discussions on the implementation of the state budget for 2020 in parliament, stated that the state debt of Armenia is $ 7. 968 million, 7.509 million of which falls on the government, the rest - the Central Bank of the Republic of Armenia. According to him, the share of external debt in the government's debt amounted to $ 5.593 million, internal debt - 1.915 million. Asatryan considers the allocation of significant funds from the state budget to service the state debt as an important derivative of the state debt problem. According to him, one tenth of the budget funds are annually allocated for this, which is a rather large burden for the state budget of a country of the caliber of Armenia. "We understand very well that countries like ours cannot exist without debts. The whole question is in the degree of controllability of these debts. Which at this stage is in the risk zone," the economist believes.
"We understand that the current state of Armenia, conditioned again by the war, requires investments. We are talking about infrastructure at the borders, infrastructure in the regions, etc. It is also clear that the state budget will not cope with such expenses. I have always said that the state debt of Armenia, in general, it is not large. The problem is in the small volumes of our GDP, which must be increased by all possible means, what I did not see yesterday and I don't see today, "he stressed. Earlier, Head of the Central Bank of Armenia Martin Galstyan said in parliament that, despite the high state debt, the Armenian government needs to continue to take measures to support the economy. "The Central Bank recognizes the legitimacy of state policy in the current exceptional conditions. Accordingly, support must be continued," Galstyan said.
To note, in 2020 the volume of anti-crisis support for the economy amounted to about $ 410 million, or approximately 3.5% of GDP. The revenues of the state budget of Armenia in 2020 amounted to 1 trillion 561 billion drams, expenditures - 1 trillion 895 billion.
According to Galstyan, as a result of a 5.4% reduction in tax revenues in 2020, the state stimulation of the economy in financial terms was 2.5-fold higher than planned. As a result, the ratio of public debt to GDP at the end of 2020 increased from 49.9% to 63.5%. In this light, the government, according to the head of the Central Bank, needs to develop an action program in order to lower the debt level below 60% in the next 5 years.