In Q1 2025, Armenia`s public debt increased by approximately $740  million, reaching $13.6 billion

ArmInfo.  In the first quarter of  2025, Armenia's public debt in dollar terms rose by approximately $739 million, increasing from $12. 842.2 billion at the end of 2024 to $13.  581.1 billion. In dram equivalent, the amount went up from 5. 092.7 trillion to 5. 318.2 trillion drams.

Let us recall that on March 14, the website of the Ministry of  Finance of Armenia reported that the country had successfully issued  $750 million worth  of Eurobonds  on the international capital market  on March 5, with a yield of 7.1% and a maturity of 10 years  (settlement date - March 12, 2025). The coupon yield of the new  Eurobonds is 6.75%. They were listed on the London Stock Exchange and  have a rating of BB- (stable) S&P / BB- (stable) Fitch / Ba3 (stable)  Moody's. It was noted that this is the fifth tranche of Armenian  Eurobonds on the international capital market, as outlined in the Law  of the Republic of Armenia <On the state budget for 2025> and  included in the Borrowing Program for 2025. The net proceeds from the  Eurobonds issuance will be used to cover the state budget deficit  (609 billion drams - ed.). As a result, according to the data of the  Ministry of Finance of the Republic, by the end of March 2025, the  government debt in American currency increased from $12. 338.2  billion (AMD 391.59/1 $) to $13. 070.6 billion (by $732 million), and  in drams - from 4. 892.8 trillion to 5. 118.3 trillion. The estimated  exchange rate of the US dollar was AMD 393.26/1 $.

85.4% of the government debt was attracted at a fixed interest rate  (84.4% by the end of 2024). External debt which includes Armenia's  debt obligations to international organizations and foreign  countries, as well as funds received from the issue of Eurobonds in  dollar terms increased from $5.590.1 billion to $6. 471.1 billion,  and 2. 359.6 trillion  to 2. 534.trillion in dram terms Domestic debt  also saw an increase, rising from $6. 388.1 billion to $6. 599.5  billion, and 2. 533.3 trillion to 2. 584.3 trillion in national  currency. The Central Bank's debt in dram terms remained steady  at  199.9 billion drams, while in dollars it  increased from $504 million  to $510.5 million. Loans issued under a state guarantee decreased  from $65.2 million to $65 million. By the end of March 2025, the  share of domestic debt in the government debt structure had increased  from 51.8% (by the end of 2024) to 50.5%, and the dram debt had  decreased from 50.8% at the end of the previous year to 50.3%.

The beauty of debt is in its payment

In January-March 2025, the volume of budget deficit financing through  net borrowing amounted to 222.6 billion drams (compared to 399.9  billion drams for the whole of 2024, with the annual program for 2025  649.2 billion drams). Of this amount, 92.2 billion drams were  attracted from internal sources (net proceeds from the placement of  government treasury bonds). Additionally,  130.4 billion drams were  sourced from external sources, aligning with the annual program of  291.4 billion drams and 357.8 billion drams, respectively. Out of  394.1 billion drams planned for the entirety of 2025, 39.2 billion  drams were allocated for servicing the government debt (payment of  interest rates). This is compared to 313.6 billion in 2024. 

Creditors of Armenia

The World Bank remains the largest creditor of the Armenian  government - the International Bank for Reconstruction and  Development and the International Development Association account for  37.6% of Armenia's external loans. The second largest creditor is the  Asian Development Bank at 21.7%, followed by the Eurasian Development  Bank at 8.5%,  the International Monetary Fund at 2.6%, and the  European Investment Bank at 3.2%. External loans from the EU amounted  make up 1.6% of the external debt structure, 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 - 4.9% (6.2% by  the end of 2023 and 5.3% in 2024), Germany - 4.6%, Japan - 2.7%,  France - 7%, China - 0.3%, and the United States - only 0.2% of the  government's external debt.

Forecasts of financial authorities

According to the Ministry of Finance, Armenia increased its public  debt by 6.2% or $997 million in 2024, totaling $12. 842.2 billion  (from $11. 845.4 billion by the end of 2023).  In dram equivalent,  the figure rose  from 4.  794.9 trillion to 5. 092.7 trillion drams.   According to the law <On the state budget of the Republic of Armenia  for 2024>, the public debt by the end of the year is projected to  reach 6. 159 trillion drams or 56.5% of GDP.  The government debt is  expected to be 5. 910.4 trillion drams ($13. 963.1 billion) or 54.3%  of GDP. In 2025, only 1. 117.1 trillion drams will be needed for the  repayment and servicing of the government debt, with 723 billion  drams allocated for repayment line and 394.1 billion drams for  servicing.