ArmInfo.In January 2022, Armenia increased the public debt by almost $60 million (up to $9 billion 282.6 million or 4 trillion 479.5 billion drams).
By the end of this year, the financial authorities plan to reach the mark of 4 trillion 986 billion drams. In 2025, Armenia will have to allocate almost $1.4 billion to pay off and service the government debt (excluding the debt of the Central Bank of the Republic of Armenia), formed by January 31, 2021, in 2029 the amount will be about $1.3 billion, and in 2031 - already a little more than $ 1.4 billion.
Thus, according to the data of the Ministry of Finance of the Republic of Armenia, in 2021, the state debt of Armenia increased by $1.257.2 billion (the estimated exchange rate of the Armenian dram against the US dollar was AMD 495.37 ) - from $7 billion 968.5 million to $9 billion 225.6 million (4 trillion 429.6 billion drams). At the same time, over its 28-year history (since Armenia gained independence), the Republic of Armenia has attracted loans in the amount of about $6.8 billion, and over the past two and a half years it has "managed" to increase the public debt by about $2 billion 358 million. As a result, the specific debt burden per capita in 2021 increased to $3.1 thousand from $2.7 thousand in 2020 (against $2.5 thousand in 2019). Of these, $2.2 thousand (against $2 thousand in 2020 and 2019) comes from external debt.
In January 2022, the government debt from $8 billion 767.9 million (4 trillion 209.8 billion drams - by the end of 2021) increased by about $44.2 million or 0.5% - up to $8 billion 812.2 million (4 trillion 252.5 billion drams). At the same time, external debt (Armenia's debt obligations to international organizations and foreign states, funds received from the issue of Eurobonds) in dollar terms remained at the level of the end of 2021 - $6 billion 185 million, and in AMD increased by 15 billion drams - from 2 trillion 969 .7 billion drams 2 trillion 984.7 billion drams. Domestic debt increased by the indicated $44.2 million - from $2 billion 583 million (1 trillion 240.2 billion drams) to $2 billion 672.2 million (1 trillion 267.8 billion drams). The debt of the Central Bank increased by 2.8% or $12.7 million - from $457.7 million or 219.8 billion drams to $470.4 million (227 billion drams). As of December 31 last year, the amount of loans issued under government guarantees decreased from $101.4 million or 48.7 billion drams to $100 million or 48.3 billion drams.
By the end of January 2022, the share of domestic debt in government debt increased from 29.5% in 2021 to 29.8% (25.4% in 2020), and AMD debt - from 28.28% ( 24.2% by the end of 2020) increased to 29.4%.
"Our debt is the right that others have over us": F. Nietzsche
In January 2022 alone, the volume of financing the budget deficit through net borrowing amounted to 24.5 billion drams (591 billion drams in 2021), 9 billion drams were allocated to pay interest rates through the government debt (181.6 billion drams in 2021).
Armenia's largest creditor is currently the World Bank - the International Bank for Reconstruction and Development and the International Development Association account for 38.5% of the state debt of the Republic of Armenia. The second largest creditor is the Asian Development Bank - 17.1%, the International Monetary Fund ranks third-7.4%, followed by the Eurasian Development Bank with 7.3% and the European Investment Bank - 2.7%. External loans from the EU in the structure of public debt amounted to 1.6%.
Among the major creditor countries of Armenia, Russia is in first place - 7.8%, Germany - 5.8%, Japan - 4.4%, France - 3.2%, China - 0.5%, and the USA - 0, 3% alone. The share of the Abu Dhabi Development Fund accounts for 0.1% of the external public debt.
Forecasts of financial authorities on public debt
According to the approved law on the state budget for 2022, by the end of this year, the public debt will amount to 4 trillion 986 billion drams, or 63.4% of GDP (the estimated exchange rate of the Armenian dram to the dollar is 477.45 drams). The government debt by December 31, 2022, in the conditions of ensuring 7% economic growth, will decrease to 60.2% of GDP - to 4 trillion 741 billion drams, from 4 trillion 275 billion drams or 60.8% of GDP expected by the financial authorities by the end of 2021 of the year. In 2022, Armenia will allocate about 10% of all state budget expenditures or 2.7% of GDP only to service the government debt. In particular, 517.2 billion drams (about $1.048 billion) will be required to service and repay the government debt, of which 302.8 billion drams (about $613 million) will be debt repayments, and 214.4 billion drams will be interest payments (about $434 million against 185.5 billion drams this year). In 2022, the weighted average interest rate on government debt will be 5%, instead of 4.6% in 2021. However, the debt structure will be significantly improved, with an increase in the share of cash indebtedness and a decrease in foreign exchange risks. In particular, in 2021-2022, it is planned to increase the share of government treasury bonds in drams in the structure of public debt, which, according to forecasts, will be 3.8% and 2.8%, respectively. At the end of 2022, the share of domestic debt will increase by 2.5% - up to 31.5%, and AMD debt - from 28.3% to 31%.
