Thursday, July 25 2024 11:25

ArmInfo. In the medium term,  Armenia will need loans in the amount of $400-450 million per year to  cover the budget deficit. This is stated in the draft decision of the  Cabinet of Ministers of the Republic of Armenia dated July 25 on the  ratification of the loan agreement with the Eurasian Development Bank  (EDB) for the provision of $100 million from the Eurasian Fund for  Stabilization and Development (EFSD). 

As stated in the explanatory note to the document, in accordance with  the goals of the strategic plan for public debt management for  2024-2026, an annual borrowing program was developed. According to  the document, in 2024, the total financing need is 970.9 billion  drams, of which 67.6% is envisaged to be covered by borrowed funds  from domestic sources, and 32.4% - by external loans.

Taking into account the above, it is considered necessary to attract  a budget support loan in the amount of about $100 million from the  Eurasian Fund for Stabilization and Development>, - the document  says. Let us recall that according to the approved state budget, in  2024, under the conditions of ensuring 7% GDP growth, the revenues of  the state treasury of Armenia will amount to 2 trillion 723 billion  drams (25.9% of GDP), and expenses - 3 trillion 206 billion drams  (30.5% of GDP). Of the 2 trillion 723 billion drams of state treasury  revenues, 2 trillion 613 billion will be tax revenues and state  duties (24.9% of GDP), 22 billion 276 million drams will be official  grants and 87 billion 676 million - other revenues. The growth of the  GDP deflator will be 4%. The state budget deficit will amount to  482.9 billion drams (about 189 billion drams in 2023) or 4.6% of GDP.  The deficit will be financed both from internal resources - in the  amount of 351.1 billion drams, and from external sources - 131.8  billion drams.

As stated in the EFSD regional economic review for the summer of  2024, the growth of the Armenian economy will slow down somewhat this  year, but will remain at a high level of 6.3%. As Sergey Ulatov,  Deputy Executive Director and Chief Economist of the EFSD, stated at  an online conference on the occasion of the release of the report,  there are quite serious budget risks in Armenia, including those  associated with high government spending, which is also associated  with political factors. , he noted.

The Eurasian Fund for Stabilization and Development (EFSD) is a  regional financial institution with assets of over US$9 billion,  established in 2009 by the Republic of Armenia, the Republic of  Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian  Federation, and the Republic of Tajikistan. The goal of the fund is  to support the economic and financial stability of the member states,  as well as their sustainable development. In Armenia, the fund's  portfolio includes a number of projects worth over US$540 million.