ESFD to provide $100mln to Armenia to cover budget deficit 

ArmInfo.The Eurasian Fund for Stabilization and Development, whose funds are managed by the Eurasian Development Bank, will provide Armenia with a loan of $100 million. The National Assembly of the Republic of Armenia discussed the draft law on ratification of the relevant agreement with the EDB at a plenary session on October 23. 

As RA Finance Minister Vahe Hovhannisyan noted in his speech, the  loan agreement was signed on May 20 of this year. The funds will be  used to cover the country's state budget deficit in 2024. The loan  will be provided in US currency, the term of the last tranche is  limited to December 31 of this year. The annual interest rate on the  loan, provided for a period of 20 years and a grace period for  payments in the first 10 years, will be 4%. The financial resources  are aimed at continuing the reform programs, many of which have  already been implemented this year.

The Minister reported that, as of the current situation, the  government's loan portfolio is 50% in foreign currency and the same  amount in national currency. In turn, the foreign currency portfolio  is also diversified: in addition to the US dollar, loans were  attracted in euros, Russian rubles and yen. By the end of the year,  the public debt to the country's GDP will be close to 50%. 

The government's target was to achieve external debt of up to 60% and  internal debt of up to 40%, but as a result of the measures taken,  this ratio was somewhat changed, resulting in a 50% to 50% indicator.  Next year, the volumes of foreign currency will be increased, but for  this, additional research will need to be conducted in order not to  create additional risks in managing the public debt and increasing  interest rates when repaying the loans attracted, which, as a rule,  are used to implement programs in the field of capital construction. 

The Government of the Republic of Armenia, in turn, co-finances the  attracted loan funds in the amount of 20%. It should be noted that  the rationale for the agreement stated that in the medium term, the  need for credit funds to support the Armenian budget, which are  planned to be received from international financial institutions,  including the Eurasian Fund for Stabilization and Development, is  estimated at 400-450 million US dollars per year.