ArmInfo. By February 29, Armenia's public debt, against the backdrop of growing domestic debt, had grown to another psychological threshold of $12 billion.
In particular, according to the Ministry of Finance of the Republic, for 2 months of 2024, Armenia increased its public debt by 0.8% or $97.5 million - to $11 billion 942.6 million (from $11 billion 845.3 million by the end of 2023). The public debt in dram terms increased by 0.8% or 33.9 billion drams - to 4 trillion 828.7 billion drams (amid a "strong AMD", when the USD began its almost 20% "fall" around mid- 2022).
During the reporting period, government debt in US currency increased by 1% or $108.5 million from $11 billion 294.6 million to $11.403.1 billion, and in drams - by 38.6 billion drams or 0.8% - to 4 trillion 601.5 billion drams. 84.6% of government debt was raised at a fixed interest rate.
External debt (Armenia's debt obligations to international organizations and foreign states, funds received from the issue of Eurobonds) in dollar terms decreased by $49.1 million (0.8%) - to approximately $5 billion 901.6 million, in dram terms - by 22.6 billion drams or 0.9% - up to 2 trillion 386.1 billion drams.
At the same time, domestic debt increased by $157.6 million (2.9%) - from $5 billion 343.9 million (2 trillion 163.2 billion drams) to $5 billion 501.5 million (2 trillion 224.4 billion drams).
The Central Bank's debt also decreased: in dollars by 2% or $11 million, from $550.7 million to $539.7 million, in drams - from 222.9 billion drams to 218.2 billion drams As of the end of 2023, the amount of loans granted with state guarantees decreased from $77.3 million or 31.3 billion drams by the end of 2023 to $75.4 million or 30.5 billion drams.
By the end of February this year, the share of domestic debt in government debt increased from 47.3% to 48.2% by the end of 2023, and dram debt increased from 45.9% to 47.4% by the end of last year.
Good debt is repaid debt
For 2 months of 2024, the volume of financing the budget deficit through net borrowing amounted to 57.4 billion drams (287 billion drams for the entire 2023, and the y-o-y plan for 2024 totals 490.8 billion drams). 80.3 billion drams were raised from internal sources (net proceeds from the placement of government treasury bonds), 22.9 billion drams from external sources, with a y-o-y plan of 350.8 billion drams and 140 billion drams, respectively.
20 billion drams out of 345.1 billion planned for the entire 2024 (256.4 billion drams last year) were allocated to service the government debt (payment of interest rates). According to the government debt repayment schedule until 2054, Armenia will have to allocate approximately $1.6 billion in 2024 to repay and service the government debt (excluding the debt of the Central Bank of Armenia), formed by the end of February this year, and more $1.9 billion in 2025, - about $1.4 billion in 2026, the amount will be about $1.6 billion in 2029, - almost $1.8 billion in 2031, and - approximately $1.4 in 2033.
Creditors of Armenia
The largest creditor (external loans) of the Armenian government remains the World Bank; the share of the International Bank for Reconstruction and Development and the International Development Association in the RA public debt is 37.6%. The second largest creditor is the Asian Development Bank - 19%, the Eurasian Development Bank is the third - 8%, followed by the International Monetary Fund - 6.2%, and the European Investment Bank - 3.2%. External loans from the EU debt amounted to 1.6% of external debt the International Fund for Agricultural Development - 1.1%, the OPEC Fund for International Development - 2%, the EBRD - 1%.
Russia is the leader among major creditor countries of the government's external debt - 5.9% (6.2% by the end of 2023), followed by Germany - 5.3%, Japan - 3%, France - 5.4%, China - 0.4%, and the US - 0.2%. Forecasts of financial authorities According to the Ministry of Finance, in 2023, Armenia's public debt increased by 11.4% or $1 billion 207.6 million - up to $11 billion 845.3 million.
During the reporting period, government debt in USD increased by $1 billion 208.3 million or by 12% - from $10 billion 086.4 million by the end of 2022 to $11 billion 294.6 million, and in AMD - by 602.3 billion drams or 15.2% - up to 4 trillion 571.9 billion drams.
According to the law "On the State Budget of the Republic of Armenia for 2024", the public debt will reach 5 trillion 314 billion drams (50.5% of GDP) by 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). In 2024, the government will need 805.2 billion drams to repay and service the debt, of which 483.0 billion drams will be debt repayment, and 322.2 billion drams will be interest payments. At the same time, as thead 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, public debt will grow by 2.4 percentage points to 49.4% of GDP by the end of 2023.
