Armenia`s minister of finance forecasts 5.5% share of budget deficit  in GDP next year 

ArmInfo. In 2025, the share of the state budget deficit of Armenia in the country's GDP will be 5.5%. This was stated by the Minister of Finance of the Republic of Armenia Vahe Hovhannisyan during the plenary session of the National Assembly of the Republic of Armenia on November 12, answering a question from Artsvik Minasyan, a member of parliament from the opposition faction "Armenia". 

The MP recalled that, according to the government program, the state  debt can be increased to a greater extent through internal sources  and in the national currency. Meanwhile, in 2025 alone, it is planned  to allocate over 609 billion drams for servicing the state debt, of  which about 256 billion drams will be from internal borrowing and 344  billion drams from external borrowing. Minasyan emphasized that in  2025 alone, 394 billion drams will be allocated for servicing the  state debt. Thus, the oppositionist continued, next year all citizens  of the country without exception - from infants to the very old -  will have to give up 12 thousand drams in favor of servicing the  state debt. In this regard, the deputy asked the minister how many  promised kindergartens and schools will be built or repaired at the  expense of foreign loans?

In response, Vahe Hovhannisyan noted that the medium-term expenditure  program envisages reducing the size of the state debt. In 2025, it  was almost possible to bring the ratio of state debt in foreign  currency and in national currency to an equal level - 50% to 50%.  Thus, it was even possible to exceed the previously planned  indicators. As for the indicators for next year, as Hovhannisyan  noted, this will be due to a number of factors, including the level  of demand for Armenian Eurobonds on the international market.

Discussions are currently underway on the most acceptable option for  the ratio in order to avoid new pressures caused by the increase in  interest rates. The goal of the country's government, the minister  emphasized, is to reduce interest rates in parallel with the  reduction of the refinancing rate by the Central Bank. Hovhannisyan  added that work is underway to implement a program for repaying the  state debt in exchange for environmental quotas. However, neither the  World Bank nor the Asian Development Bank have such mechanisms, and  the government is trying to resolve the issue in a bilateral format.

"Negotiations on this issue have already entered the practical phase,  and I think that next year we will have news on this project," the  minister said, adding that significant amounts should not be expected  within the framework of this program.

The minister previously reported that in 2025, Armenia intends to  attract loans in the amount of $1.247 billion. According to the draft  state budget, the deficit in 2025 will amount to 609.4 billion drams  or 5.5% of GDP, against 482.9 billion drams or 4.6% of GDP in the  budget approved for the current year.