ArmInfo. The Asian Development Bank (ADB) will provide Armenia with a $150 million loan to replenish the budget. On January 22, the Armenian government approved a proposal to sign a draft loan agreement under the "Fiscal Stability and Financial Market Development - Subproject 3" program.
As stated in the document's rationale, the need for budget support loans, planned to be received from international financial institutions, including the Asian Development Bank, is estimated at approximately $675 million. Based on the above, the Armenian Ministry of Finance has initiated the process of attracting a $150 million budget support loan from the Asian Development Bank. A prerequisite for receiving budget support funds is the implementation of the measures and reforms outlined in the bilaterally agreed policy action table (Subproject 3), which have already been implemented.
Subproject 3 consists of three main components:
- Strengthening budget, public debt, and financial risk management policies, and enhancing the sustainability of infrastructure investments;
- Improving the infrastructure of the state securities and money markets;
- Expanding the range of financial instruments and investors, as well as enhancing transparency and corporate governance.
Budget support funds will be used to finance the deficit defined by the Law of the Republic of Armenia "On the State Budget of the Republic of Armenia for 2025."
The loan terms proposed in the draft agreement are as follows: loan interest rate type: floating; annual loan interest rate: SOFR + 0.5% margin + 0.1% (repayment premium). The repayment premium depends on the average loan term, a rate of 0.1% applies to loans with an average repayment term of 9-13 years. Taking into account the SOFR rate as of 17.12.2025: 3.69%, the floating interest rate on the loan will be 4.66%. Loan provision fee: 0.15% per annum, calculated from the unpaid loan amount, the start date of the calculation is the 60th day after the date of signing the agreement, paid semi-annually, simultaneously with the payment of interest. The principal amount of the loan is repaid in full, the repayment method is equal semi-annual payments. Loan term: 15 years, of which the grace period is 3 years. The principal amount is repayable in 24 equal semi-annual payments from July 15, 2029 to January 15, 2041. Interest payment and debt repayment dates: January 15 and July 15.
By December 31, 2025, the public debt of Armenia, compared to the end of December 2024, increased by approximately $1.7 billion, or 13.1%, to $14 billion 531 million. At the same time, at the end of December 2017, the total public debt of Armenia was $6.774 billion, and by the time Nikol Pashinyan's government was formed, at the end of April 2018, this figure was at $6.867 billion. Thus, over the 28-year history (since Armenia gained independence), the Republic of Armenia has attracted loans in the amount of approximately $6.8 billion, and from 2018 to the end of 2025, the authorities to increase the public debt by approximately $7 billion 757 million.
Nevertheless, Armenian Finance Minister Vahe Hovhannisyan does not consider the growth of the national debt or the cost of servicing it problematic. "Armenia's national debt is growing. It has grown from so many billions to so many, but there are also countries whose debt amounts to trillions, so why talk about these billions now? Let's talk about the debt ratio. For example, if in 2018 the debt-to-GDP ratio was about 52%, now it is 48%," he said yesterday at a final press conference, pointing out that Armenia's debt servicing capacity has increased. Furthermore, he emphasized that by the end of 2025, the deficit was lower than expected by at least 1 percentage point - 4.5%. As a result, if the Ministry of Finance expected the government debt in 2025 to exceed 50%, the actual figure was approximately 48.7%, while for 2024 it was 48%.
