ArmInfo.Armenia`s government will allocated 9.8% of the 2022 state budget expenditures to serve the government debt, Minister of Finance Tigran Khachatryan stated in Parliament in introducing the 2022 draft budget.
Specifically, Armenia`s 2022 state budget is estimated at 4,991bln (about 10.516bln, 63.4% of GDP) an AMD 482bln increase as compared with the 4,509bln or 64.1% of the GDP expected by the end of this year.
By December 31, 2022, the government debt is expected to decrease 0.6% down to AMD 4.740bln or 60.2% of the GDP (about $9.603mln). The Ministry of Finance expects the figure to reach AMD 4.274bln (about $8.656mln) or 60.8% of the GDP by the end of this year. Thus, an increase of about $947mln is expected (at an exchange rate of AMD 493.6$1).
The share of government treasury bonds in the government debt is expected to reach 2.9% and 2.8% in 2021 and 2022 respectively, with the share of domestic debt to reach 30.7% by the end of next year (a 2.4% increase).
The budget deficit is expected to be reduced by about AMD 99bln or 29% - down to AMD 243bln or 3.1% of the GDP. The budget deficit will be financed due to both internal and external loans - AMD 285.2bln and AMD 42.2bln respectively.
In 2022, a total of AMD 517.2bln (about $1.048bln) will require for serving and recovering the government debt, with AMD 302.8bln (about $613mln) to be allocated for debt recovery and AMD 214.4bln for payment of interests (about $434mln against AMD 185.5bln this year).
"The funds to be directed to serve the government debt wil reach 2.7% of the GDP. In 2022, the average weighted interest on the government debt will reach 5% against 4.6% in 2021," Khachatryan said. This Jan-Sept, Armenia`s national debt increased by $1.069bln up to $9,038.1mln. Since Armenian gained its independence 28 years ago, the country has borrowed about $6.8bln, with iys national debt increasing by $2.106bln. In Jan-Sept 2021, Armenia`s government debt increased from $7,508.5mln (by the end of last year) up to $8,564.5mln - a 14.1% increase.
Armenia`s major creditor is the World Bank - the share of the International Bank for Reconstruction and Development and the International Development Association is 38.8%. The second major creditor is the Asian Development Bank - 16.8%, followed by the International Monetary Fund - 7.6% and the Eurasian Development Bank - 7.2%. Armenia`s major creditor nations are Russia (7.2%), Germany (6%), France (3.1%), Japan (4.5%), China (0.5%), and the USA (0.3%). The share of the Abu Dhabi Development Bank is 0.1%.
Armenia`s 2021-2026 fiscal policy is oriented to promote economic growth (7% to 9% under favorable conditions) through improvement of tax administration will also raise the taxGDP ratio by 9.9 percentage points. As a result of fiscal consolidation of the government debt, the authorities promise not only to revert to the law-set 60% for the government debt, but also reduce it to 54% of the GDP.
