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.
