ArmInfo. Armenia's public debt is stable, predictable, and manageable. This was stated by RA Minister of Finance Vahe Hovhannisyan on November 12 from the podium of the National Asse-mbly during the presentation of the country's draft 2026 state budget.
According to the minister, the issue of public debt is often exaggerated by opponents of the government. In particular, much is made of the fact that public debt has doubled since 2018. "I must reiterate that the public debt is aimed at increasing the country's economic potential, that is, improving the well-being of Armenian citizens. Everyone who borrows money, regardless of the purpose, hopes for good future repayment opportunities. The same is happening at the state level. Over the past seven years, we have increased revenues so much, including through debt, that if we decide to return to 2018 levels, it will take 1.5 years," the minister noted, asking why the authorities are not taking this step.
"Because our capabilities and ambitions have changed. If we take this step, we will be forced to cut spending by 58%. For example, defense spending will be reduced by 429 billion drams, or 65%, education spending by 178 billion drams, or 60%, and social spending by 459 billion drams, or 54%," the Finance Minister said.
He added that increasing domestic debt is becoming increasingly important in the government's portfolio. While it stood at only 19% in 2018, it has steadily increased over the following seven years, reaching 50.8% in 2024. This policy has achieved several important results. First and foremost, the risk of exchange rate fluctuations has been significantly reduced. Furthermore, the government's needs have been largely met through savings in the domestic financial market, making it possible to pay interest rates to the country's residents. Another important factor is facilitating the development of the domestic government treasury bond market. "The current public debt structure is much more diverse and stable than what we had in 2018," the minister emphasized, adding that government bonds have also become attractive to international investors.
By the end of 2026, Armenia's public debt will amount to approximately $17 billion, or 55% of GDP. Compared to the end of 2025, when the debt is projected to be around $15 billion, or 53% of GDP, the debt volume will increase by almost $2 billion.
