In 2024, Armenia increased its public debt by almost $1 billion

ArmInfo. Armenia's public debt in dollar terms increased by approximately $997 million by the end of December 2024, reaching $12. 842.2 billion (up from $11. 845.4 billion by the end of 2023). In dram equivalent, the debt rose from 4 trillion 794.9 billion to 5 trillion 092.7 billion. In particular,  according to data from the Ministry of Finance of the Republic, over  the 12 months of 2024, the government debt in US dollars increased  from $11 billion 294.6 million (at an exchange rate of AMD 404.79per  $/1) to $12 billion 338.2 billion (at AMD387.05 per $/1). In dram  equivalent, the debt increased from 4 trillion 571.9 billion to 4  trillion 892.8 billion drams. The estimated exchange rate of the US  dollar was AMD 396.56 per $/1 (compared to AMD 404.79 at the end of  2023).

84.4% of the government debt was attracted at a fixed interest rate  (84.1% by the end of 2023). At the same time, Armenia's external debt  which includes debt obligations to international organizations and  foreign countries, funds received from the Eurobond issuance, has  decreased in both dollars and national currency:  in dollar terms  from $ 5 billion 950.7 million to $ 5 billion 590.1 million, and in  dram terms - from 2 trillion 408.9 billion drams to 2 trillion 359.6  billion drams.

Domestic debt has increased in both dollars, from $ 5 billion 343.9  million to $ 6 billion 388.1 million, and in the national currency,  from 2 trillion 163.2 billion drams for 2023 to 2 trillion 533.3  billion drams. The Central Bank's debt also decreased, from $550.8  million to $508.2 million in dollars, and from 223 billion drams to  199.9 billion drams.  By the end of December 2024, the share of  domestic debt in the government debt structure increased to 51.8%  from 47.3% at the end of 2023. Additionally, the dram debt increased  from 45.9% to 50.8%.

 The beauty of a debt is its payment or one good turn deserves   another 

In the period from January to December 2024, the volume of budget  deficit financing through net borrowing amounted to 399.9 billion  drams. This was an increase from the 287 billion drams borrowed in  2023, and it was below the annual program for 2024, which was set at  425.3 billion drams). 369 billion drams were sourced internally,  primarily through the net proceeds from the placement of government  treasury bonds.  30.9 billion drams were obtained from external  sources, with an annual program of 350.8 billion drams and 74.5  billion drams, respectively. Out of 345 billion drams allocated for  the entire 2024 (compared to 256.4 billion drams in 2023), 313.6  billion drams were dedicated to servicing the government debt  (interest payments).

Creditors of Armenia

The World Bank remains the largest creditor of the Armenian  government  in terms of external loans, with the International Bank  for Reconstruction and Development and the International Development  Association accounting for 37.6% of the RA public debt. The second  largest creditor is the Asian Development Bank - at 21.2%, the  Eurasian Development Bank is in third place - at 8.4%, followed by  the International Monetary Fund - at 3.4%, and the European  Investment Bank - at  3.1%. The EU external loans make up 1.5% of the   external debt structure, with the International Fund for Agricultural  Development - at 1%, the OPEC Fund for International Development - at  3%, and the EBRD - at 0.9%. Among the major creditor countries, the  Russian Federation is in first place - 5.3% (6.2% by the end of  2023), followed by Germany - at 4.5%, Japan - at 2.7%, France - at  6.7%, China - at 0.3%, and the United States at just 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. 207.6 billion , reaching a total of  $11.845.3 billion . According to the law the public debt by the end of the year  was expected to be 5. 314 trillion  drams (50.5% of GDP), with the  government debt at 5. 082.9  trillion drams (48.3% of GDP) or $11.892  billion.  In 2024, it was planned to allocate 805.2 billion drams for  the repayment and servicing of the government debt, with 483.0  billion drams  for debt repayment, and 322.2 billion drams  for  interest payments.

However, according to  the state budget law for 2025, by the end of  2024, the state debt was expected to reach 5 trillion 272 billion  drams, and government debt was projected to be 5 trillion 038.5  billion drams ($12 billion 647.9 million), accounting for 49.8% of  GDP.