ArmInfo.Armenia's Finance Minister Vahe Hovhannisyan and Regional Director of the French Development Agency (AFD) for Eurasia Mathieu Vasseur signed "Credit Agreement No. CAM 1024 01 C between the Republic of Armenia and the AFD" to attract a loan of 75 million euros within the framework of the budget support program.
French Ambassador to Armenia Olivier Decottignies was the second signatory from the French side. As reported by the press service of the RA Ministry of Finance, the goal of the program is to support the Armenian government in increasing the efficiency and stability of public services and developing the financial sector. It consists of three main components: 1) improving the public finance management system 2) strengthening the system of issuing and managing government securities and the infrastructure of money markets 3) developing new instruments for financing entrepreneurship and ensuring more transparent management.
Budget financing is part of a multi-year program implemented jointly with the Asian Development Bank. The French Development Agency (ADF) was founded in 1998 and is the operator for France's bilateral development finance mechanism. Under the jurisdiction of the Ministries of Foreign Affairs, Economy and Finance, Overseas Territories and the Interior of France, the Agency is a trade and industrial state institution that fights poverty and promotes economic growth in developed countries and in the French overseas territories. Effective cooperation between the Republic of Armenia and the ADF began in 2012.
According to the 2024 state budget of Armenia, the state treasury deficit this year will amount to 341.1 billion drams or 3.2% of GDP (about $880 million, the estimated exchange rate of the US dollar is AMD385.9 per $1). As a result, the government debt/GDP ratio by the end of the current year will amount to 48.4%. Maintaining the debt at this level will allow maintaining the positive trends of the RA government rating, creating an additional "stability reserve" to counter possible future risks, and also having a manageable level of interest payments on the debt.
