Armenia`s public debt exceeded USD 11.1 billion in Nov 2023, with  y-o-y increase of 10%

ArmInfo. By November 1, 2023, Armenia's public debt exceeded $11.1 billion (4.5 trillion drams),  having increased by 10% year-on-year (the same as a year ago). 

The continued double-digit y-o-y growth rate is largely due to an  increase in domestic debt by 23.1% - to $4.8 billion (1.9 trillion  drams) and, to a lesser extent, an increase in external debt by 3.3%  - to $6.3 billion (2.6 trillion drams). This is evidenced by  preliminary data from the Ministry of Finance of the Republic of  Armenia, published by the Statistics Committee, according to which a  year earlier, internal debt showed a higher growth of 56%, and  external debt fell by 9%. Over the 10 months of 2023, public debt  increased by 4.7% (against a 10% increase over the 10 months of  2022), which was due to an increase in domestic debt by 14.3% and a  decline in external debt by 1.6%, thereby more at a restrained pace,  repeating last year's multidirectional dynamics, when a jump in  domestic debt by 50% was accompanied by a decline in external debt by  7.6%.

The Government's share of external debt by November 1, 2023, has   increased imperceptibly to 91.7% from 91.2% a year earlier, with the  Central Bank's share declining to 8.3% from last year's 8.8%,  amounting to $5.8 billion and $523.9 million respectively in absolute  terms. Moreover, the multidirectional y-o-y dynamics of the external  debt of the Government and the Central Bank has been preserved, but  this time the government's dynamics have been up. In particular, the  dynamics of the government's foreign debt increased from 9.7% to  3.6%, while the Central Bank's external debt changed from a 13.6%  increase to a 2.7% decrease . In just 10 months of 2023, the external  debt of both the Government and the Central Bank decreased - by 1.7%  and 5%, respectively, while a year ago during the same period the  government debt was in decline - 9.7%, and the CB showed 17.7%  growth.

Domestic public debt is dominated by government bonds, the share of  which  increased  slightly to 88.3% by November 2023 from 88% last  year ($4.2 billion or 1.7 trillion drams), with a slowdown in y-o-y  growth to 20% in absolute value (from 45.8% a year earlier ). The  share of Armenian Eurobonds in domestic debt decreased imperceptibly  year-on-year - from 11.6% to 11.5%, exceeding $546.4 million or 219.8  billion drams in absolute terms, with a 3.4-fold slowdown in y-o-y  growth to 19.4%. The remaining 0.2% or $11.6 million (4.7 billion  drams) fell to the share of internal guarantees, which decreased by  13.4% year-on-year. Over the 10 months of 2023, the volume of  government bonds in the domestic government debt, increased by 13.5%,  Eurobonds - by 14.1%, and internal guarantees decreased 2-fold, while  a year earlier in the same period the growth rates of the first two  components were much higher - 45.8% and 2.8- fold respectively.

In Armenia, the specific debt burden per capita by October 1, 2023  increased to $3.8 thousand from $3.4 thousand a year earlier.  Moreover, the per capita debt burden increased both in terms of  external debt from $2.1 thousand to $2.2 thousand, and in terms of  internal debt from $1.3 thousand to $1.6 thousand, amid an increase  in the population of Armenia over the year by 23.2 thousand people -  up to 2.994 million  people by October 1, 2023.

The degree of coverage of external debt by gold and foreign exchange   reserves by October 1, 2023 increased to 64% from 60.8% a year  earlier, against the background of a y-o-y growth of external debt by   6% with an increase in reserves by 11.4%. And this despite the fact  that reserves in August of this year reached a historical maximum,   retreating only slightly from this level in September. As a   comparison, we note that a year earlier on this date, external debt   was in decline by 8%, and reserves showed a higher growth of 17.2%.

The ratio of public debt to GDP in 2022 decreased from 63.4% to   49.2%, with double-digit growth in both public debt (by 15.3%) and   GDP (by 12.6%).  In 2022, the ratio of external debt to GDP also   decreased - from 45.7% to 29.9%, with a decline in external debt of   3%. The degree of coverage of external debt by gold and foreign   exchange reserves increased in 2022 from 48.6% to 63.7%, against the   backdrop of a decline in external debt with an acceleration of   double-digit growth in reserves from 23.5% to 27.3%.