Armenian government`s domestic debt exceeds external debt by end of July 2024

ArmInfo. By the end of July 2024,  the domestic debt of the Armenian government exceeded the external  debt. At the same time, the state debt in dollar terms increased to  $12 billion 335.4 million (from $11 billion 845.4 million by the end  of 2023). In dram equivalent, the indicator decreased from 4 trillion  794.9 billion to 4 trillion 790.8 billion.

In particular, according to the data of the Ministry of Finance of  the Republic, over 7 months of 2024, the government debt in American  currency increased from $11 billion 294.6 million (404.79 drams per  $) to $11.822.8 billion (388.38 drams per $), and in dram equivalent - from 4 trillion 571.9 billion to 4 trillion 591.7  billion drams. 84.1% of the government debt was attracted at a fixed  interest rate. At the same time, the external debt (Armenia's debt  obligations to international organizations and foreign countries,  funds received from the issue of Eurobonds) decreased both in dollars  and in national currency:  in dollar terms from $5 billion 950.7  million to $5 billion 749 million, in dram terms - from 2 trillion  408.9 billion drams to 2 trillion 232.8 billion drams.

The domestic debt increased both in dollars - from $5 billion 343.9  million to $6 billion 073.7 million, and in national currency: from 2  trillion 163.2 billion drams for 2023 to 2 trillion 358.9 billion  drams. The Central Bank's debt also decreased: in dollars from $550.8  million to $512.7 million, in drams - from 223 billion drams to 199.1  billion drams. By the end of July this year, the share of domestic  debt in the government's debt structure increased to 51.4% from 47.3%  at the end of 2023, and the dram debt increased from 45.9% to 50%. A  debt is paid back In January-July 2024, the volume of budget deficit  financing through net borrowing amounted to 134.4 billion drams (287  billion drams for the whole of 2023, and the annual program for 2024  is 490.8 billion drams). 191.1 billion drams were attracted from  internal sources (net proceeds from the placement of government  treasury bonds), 56.7 billion drams from external sources, with an  annual program of 350.8 billion drams and 140 billion drams,  respectively. 162.1 billion drams out of 345 billion drams planned  for the whole of 2024 (256.4 billion drams in 2023) were allocated  for servicing 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 37.8% of the RA public debt. The second  largest creditor is the Asian Development Bank - 19.6%, the third  position is occupied by the Eurasian Development Bank - 8.2%,  followed by the International Monetary Fund - 5.3%, and the European  Investment Bank - 3.3%. External loans from the EU in the structure  of external debt amounted to 1.6%, the International Fund for  Agricultural Development - 1.1%, the OPEC Fund for International  Development - 2%, the EBRD - 0.9%. Among the major creditor  countries, the Russian Federation is in first place - 5.8% (6.2% - by  the end of 2023), Germany - 5.1%, Japan - 2.9%, France - 5.5%, China  - 0.4%, and the USA - only 0.2% of the government's external debt.

Forecasts of financial authorities According to the Ministry of  Finance, in 2023, Armenia increased its public debt by 11.4% or $1  billion 207.6 million - to $11 billion 845.3 million. During the  reporting period, the 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 dram - by  602.3 billion drams or 15.2% - to 4 trillion 571.9 billion drams.  According to the law , the public debt by the end of this year. will reach 5  trillion 314 billion drams (50.5% of GDP), instead of 4 trillion 659  billion drams expected by the end of 2023 (49.3% of GDP), and 4  trillion 659 billion drams, actually for 2022 (49.2% of GDP). The  government 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 by the end of 2023  and 3 trillion 969.7 billion drams or $10 billion 086 million - for  2022 (46.7% of GDP). In 2024, 805.2 billion drams will be required to  repay and service the government's debt, of which 483.0 billion drams  will be debt repayment and 322.2 billion drams will be interest  payments.