Tuesday, May 10 2022 12:54

ArmInfo.Armenia's specific debt burden per capita continues to grow, reaching $3.2 thousand by April 1, 2022 from $2.9 thousand a year earlier. Moreover, the per capita  debt burden from external debt has not changed much, having only  slightly decreased from $2.3 thousand to $2.2 thousand, and from  domestic debt it has increased from $653 to $916.

At the same time, the population of Armenia decreased by 2.3 thousand people over the  year - up to 2.962 million people by April 1, 2022.

The degree of coverage of external debt by gold and foreign exchange  reserves by April 1, 2022 decreased to 44% from 44.8% a year earlier,  against the backdrop of a meager y-o-y decline and external debt and  reserves - by 1% and 3%, respectively. As a comparison, we note that  a year earlier, on this date, external debt and reserves showed  almost the same double-digit growth - by 17.1% and 16.5%,  respectively.

According to the preliminary data of the Ministry of Finance of the  Republic of Armenia, published by the Statistical Committee, by April  1, 2022, Armenia's public debt amounted to $9.357 billion (4.564  trillion drams), slowing down the y-o-y growth to 8.1% from 19.2% a  year earlier. This is due to the decline in external debt, with the  accelerated growth of domestic debt. In particular, external debt  reversed its y-o-y dynamics from 17.1% growth to 1% decline,  amounting to $6.645 billion (3.241 trillion drams), domestic debt  accelerated its growth from 24.6% to 40%, exceeding $2.711 billion  (1.322 trillion drams). In Q1 2022 alone, the public debt grew by  only 1.4%, as a result of a reversal of the external debt trend  towards a decline by 0.1%, while domestic debt accelerated to 5.2%,  while a year earlier in the same quarter there was more high growth  in public debt - by 8.6%, which was accompanied by an increase in  external debt by 10.9% with a modest increase in domestic debt by  1.1%.

The share of the Government in the structure of external debt in Q1  2022, increased to 92.9% from 92.6% a year earlier, and the share of  the Central Bank decreased from 7.4% in the previous year to 7.1%,  amounting in absolute terms to $6.172 billion and $473.6 million,  respectively. Moreover, the decline in the external debt of the  Central Bank continued, in parallel with which the external debt of  the Government began to decline. In particular, the government's  external debt reversed the y-o-y trend from 18.8% growth to 0.8%  decline, while the Central Bank accelerated the decline from 1% to  4.2%. In Q1 2022 alone, government external debt decreased by 0.3%,  while the Central Bank debt, on the contrary, increased by 3.5%,  while a year earlier, in both cases, quarterly growth was recorded -  by 11.2% and 7.5% respectively.

At the same time, government bonds prevail in the structure of  domestic public debt with a decrease in the share by April 2022 to  93.1% from 95% a year earlier ($ 2.5 billion or 1.2 trillion drams),  with an acceleration of y-o-y growth in absolute value from 28.9% to  37.1%. The share of Armenian Eurobonds in y-o-y terms increased from  5% to 6.5%, amounting to $176.8 million or 86.2 billion drams, a  change in the y-o-y dynamics of the absolute value from the 23.9%  decline to 84.2% growth. And the remaining 0.4% fell to the share of  internal guarantees - $10.98 million or 5.4 billion drams, in the  absence of them last year. In Q1 2022 alone, the volume of government  bonds increased by 5%, Armenian Eurobonds - by 10%, and domestic  guarantees, on the contrary, decreased by 1.6%.

It should be noted that the ratio of public debt to GDP for 2021  decreased to 63.4% from 67.4% in 2020, with an increase in public  debt by 15.8% and GDP by 5.7%. In 2021, the ratio of external debt to  GDP also decreased - to 45.7% from 51.2% in 2020, with an increase in  external debt by 9.8%. According to the May forecast of the IMF for  2022, the ratio of public debt to GDP in Armenia will grow to 67.7%.  And according to the April WB forecast for 2022, the ratio of public  debt to GDP of Armenia will reach 66.9%, continuing to rise in 2023 -  up to 67.6%, after which it will decrease to 66.6% in 2024. Moreover,  both the IMF and the WB worsened the forecast for Armenia's GDP  growth for 2022, expecting a slowdown to 1.5% and 1.2%, respectively.  And this is after the exit of the Armenian economy from a 7.2%  decline in 2020 to a 5.7% growth in 2021.