ArmInfo.Maintaining macroeconomic stability in 2024 will make it possible to better manage public debt, keeping its volume at less than 50% of the country's GDP, Minister of Finance Vahe Hovhannisyan stated on November 8 at a meeting of the Committee on Finance and Budget, RA Parliament, as he presented the draft state budget of the country for next year.
As the minister noted, in 2024, work will continue to improve the public debt portfolio by increasing debt in the national currency and reducing it in foreign currency. In October of this year, Eurobonds were repurchased, which, on the one hand, contributed to these processes, and on the other, reduced the risk of refinancing. This step, as the head of the Ministry of Finance noted, will reduce the volume of one-time payments on Eurobonds, which are planned to be made in 2025.
All these measures instill confidence in effective risk management and will make it possible to attract new funds, keeping in mind more favorable market conditions, rather than raising funds in conditions where there are problems with paying current debts," Hovhannisyan said, adding that next year the a process of reforms in various areas, which will lead to an increase in the country's GDP by at least 1%.
The head of the Ministry of Finance noted that when managing public debt, various scenarios and risks are calculated, which take into account not only sharp fluctuations in exchange rates, but also failure to achieve the target GDP growth rate of at least 7%, additional external shocks, underfulfillment of planned investment volumes, etc. According to the scenario of the Ministry of Finance, the level of the country's public debt in 2024 will be 48.6% in relation to the country's GDP.
According to the bill, in 2024 the economic growth rate is planned at a level of at least 7%. State treasury revenues are provided at AMD 2.566bln, which is 15.4% higher than the plan for 2023, and expenses - 3.017bln, or 15.9% higher. Among expenses, capital expenditures will amount to AMD 695bln, or 22% more than the plan for 2023. At the end of next year, the tax-to-GDP ratio is planned to increase by 0.75%. The budget deficit will be about AMD 340bln or 3.2% of GDP. As a result, by the end of 2024, the government's public debt to GDP ratio will be 48.4%, that is, below 50%.
According to the Ministry of Finance, in January-September 2023, the RA public debt increased by 6.4% - to $11.3bln. At the same time, government debt increased by 7% - to $10.8bln, of which external debt - by 1.5% - to approximately $6bln, and domestic by 14.7% - to $4.8bln. As a result, domestic debt increased to 44.5%, against 41.6% by the end of 2022, and AMD debt increased from 37.9% up to 42.7%. 159.2bln were allocated to service (pay interest rates) the government debt, with an annual program of AMD 272.8bln.
According to the forecasts underlying the 2023 state budget, as of December 31, 2023, the government's debt will amount to AMD 4.645bln or 49.8% of GDP and will decrease by 0.3 percentage points compared to the end of 2022.
