ArmInfo. In 2023, Armenia's public debt increased by 11.4% or 1 billion 207.6 million dollars to 11 billion 845.3 million dollars.
According to the debt repayment schedule of the government until 2054, Armenia should allocate about 1.7 billion dollars in 2024 for the repayment and maintenance of the state debt formed by the end of 2023 (excluding the debt of the Central Bank of Armenia), more than $1.8 billion - in 2025, about $1.4 billion -in 2026, the amount will be slightly more than $1.5 billion -in 2029, and about $1.8 billion- in 2031. According to the RA Ministry of Finance, in terms of the appreciation of the national currency (the American dollar began its almost 20% " decline " approximately in mid-2022), the public debt in dram terms increased by 14.5% or 608.2 billion drams - up to 4 trillion 794.9 billion drams.
During the reporting period, government debt in American currency increased by $1 billion 208.3 million or 12% - from $10 billion 086.4 million by the end of 2022 to $11 billion 294.6 million, and in drams - by 602.3 billion drams or 15.2% - up to 4 trillion 571.9 billion drams. 15.9% of government debt alone was attracted at a fixed interest rate (16.5% at the end of 2022 and 17.1% at the end of 2021).
Armenia's external debt (Armenia's debt obligations to international organizations and foreign states, funds received from the issue of Eurobonds) in dollar terms increased by $56.6 million (1%) - to approximately $5 billion 950.7 million, in dram terms - by 89.1 billion drams or 3.8% - up to 2 trillion 408.8 billion drams. Domestic debt increased by $1 billion 151.6 million (27.5%) - from $4 billion 192.3 million (1 trillion 650 billion drams) to $5 billion 343.9 million (2 trillion 163.2 billion drams).
The Central Bank's debt increased in dollars and decreased by 0.1% or $0.6 million - from $551.3 million or 217 billion drams (the increase in drams was 2.7%) to $550.7 million or 222.9 billion drams. As of the end of 2022, the amount of loans provided with state guarantees decreased from $87.1 million or 34.3 billion drams to $77.2 million or 31.2 billion drams.
By the end of 2023, the share of domestic debt in government debt increased from 41.6% by the end of 2022 to 47.3%, and dram debt increased from 37.9% to 45.9% by the end of 2022.
Good debt is repaid debt.
During the 12 months of 2023, the amount of financing the budget deficit through net borrowing was 287 billion drams (for the whole year 2021: 591 billion drams, and the annual plan for 2023: 345.1 billion drams). 360.3 billion drams were received from internal sources (allocation of state treasury bonds), 73.3 billion drams from external sources, according to the annual plan, respectively, 384.9 billion drams and 39.8 billion drams.
253.4 billion drams out of 256.4 billion drams planned for the entire 2023 (181.6 billion drams for 2021) were allocated to service the government debt (payment of interest rates).
Creditors of Armenia
The largest creditor (external loans) of the Armenian government remains the World Bank - the International Bank for Reconstruction and Development and the International Development Association account for 37.1% of the RA government debt. The second largest creditor is the Asian Development Bank - 18.7%, the Eurasian Development Bank is in third place- 7.8%, followed by the International Monetary Fund - 6.9%, and the European Investment Bank - 3.1%. External loans from the EU within the external debt amounted to 1.6%, the International Fund for Agricultural Development - 1.1%, the OPEC Fund for International Development - 2%, the EBRD - 1%.
Among the major creditor countries, the leader is the Russian Federation with 6.2%, followed by Germany with 5.3%, Japan with 3.1%, France with 5.4%, China with 0.4%, and the United States with 0.2%.
Financial authorities forecasts
According to the law "On the State Budget of the Republic of Armenia for 2024", the state debt will amount to 5 trillion 314 billion drams (50.5% of the GDP) at the end of this year, instead of 4 trillion 659 billion drams expected by the end of 2023 (49.3% of GDP), and 4 trillion 659 billion drams actual for 2022 (49.2% GDP). The government's debt will amount to 5 trillion 082.9 billion drams (48.3% of GDP) or $11 billion, 892 million, against 4 trillion 446.1 billion (47% of GDP) or $10 billion 910 million expected at the end of 2023 and 3 trillion 969.7 billion drams or $10 billion 086 million - for 2022 (46.7% of GDP). To repay and service the debt in 2024, the government will need 805.2 billion drams, of which 483.0 billion drams will be debt repayment, and 322.2 billion drams will be interest payments.
At the same time, as head of the Ministry of Finance Vahe Hovhannisyan said on December 22 in parliament, presenting the corresponding draft decision, after the Armenian government assumes most of the financial obligations of the government and citizens of Nagorno-Karabakh, the government debt by the end of 2023 in relation to GDP will increase by 2.4 p.p. - up to 49.4%.
