Tuesday, June 15 2021 16:54
Naira Badalian

In 5 months of 2021, Armenia`s national debt increased by $ 848  million, and in 3 years by almost $ 2 billion

In 5 months of 2021, Armenia`s national debt increased by $ 848  million, and in 3 years by almost $ 2 billion

ArmInfo. In January-May 2021, Armenia's public debt increased by $ 848 million - up to $ 8,816 billion. To note, as of April 2018, that is, before the "Velvet  Revolution", the national debt was at $ 6,867 billion.

Thus, over  three years, the figure increased by $ 1,949 billion.  So, at the end  of December 2017, the total public debt of Armenia reached $ 6.774  billion, and by the time the new government was formed, at the end of  April 2018, this figure was $ 6,867 billion. By the end of 2018, the  public debt increased to $ 6,922 billion, 2019 - up to $ 7,321  billion. By the end of 2020, the national debt increased by $ 647  million - to $ 7.968 billion, of which $ 7.509 billion is government  debt (external debt - $ 5.593 billion, and domestic debt - $ 1.915  billion). Meanwhile, according to the approved state budget, in 2020  Armenia planned to attract 171.6 billion drams or $ 360.2 million  (the estimated exchange rate of the US dollar to the Armenian dram is  476.46), but due to the pandemic and the war, the figure increased  almost 2-fold.

As earlier acting Minister of Finance of Armenia Atom Janjughazyan  explained in parliament, the increase in the state debt is the price  that not only Armenia, but the whole world paid, in order, in any  way, to mitigate the negative impact of the crisis in 2020. In  particular, if the ratio of government debt to GDP by the end of 2019  was 49.9%, then by the end of 2020 the level of government debt to  GDP reached 63.5%.  This, as the minister pointed out, according to  the logic of fiscal rules allowing for growth of up to 60% of GDP,  obliges the Armenian government to submit a draft macro and fiscal  measures that will allow the republic to return to the permissible  60% within the next 5 years. "The work on this strategic program is  in the process and it will be presented in parallel with the  medium-term expenditure program," Janjughazyan assured.

Already in 2021, the national debt began to grow at a high rate. For  5 months, its indicator increased by $ 848 million, reaching $ 8.816  (of which the government debt is $ 8 317.6 billion). Meanwhile,  according to the annual plan of external borrowing, Armenia planned  to attract a total of $ 308.2 million or 152.2 billion drams to  finance the deficit of 341 billion drams in 2021. Borrowings from the  capital market (sovereign bonds) have already taken place for $ 500  million. To pay off and service the government debt, Armenia will  need 480.4 billion drams (the estimated rate of the Armenian dram to  the dollar is 493.76 drams).  According to the forecasts laid down in  the basis of the state budget for the current year, as of December  31, 2021, the government debt will amount to 4.522 billion drams or $  8.551 billion - 66% of GDP.  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 the gross  external debt of Armenia, which already in 2020 exceeded GDP to  103.5%, will continue to prevail even more over GDP both in 2021  (107%) and in 2021 (105.1%). At the same time, the World Bank  predicts the growth of Armenia's GDP in 2021 by 3.4%, with an  acceleration in 2022 to 4.3%, and the IMF predicts a meager 1% GDP  growth in Armenia in 2021, with an acceleration in 2022 to 3.5%. 


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