Wednesday, May 29 2024 17:03
Naira Badalian

By May, Armenia`s public debt exceeded $12 billion

By May, Armenia`s public debt exceeded $12 billion

ArmInfo.By May 2024, the public debt of Armenia in dollar terms crossed another psychological mark of  $12 billion. In dram equivalent, the figure decreased by 2.4%.  In particular, according to the Ministry of Finance of the Republic, over the 4 months of 2024, Armenia increased its public debt by 1.9% or $97.5 million - to $12 billion 070.4 million (from $11 billion 845.3 million by the end of 2023). Public debt in dram terms  decreased by 2.4% or 113.9 billion drams - up to 4 trillion 681 billion drams (this is against the backdrop of a "strong dram" when the USD began its almost 20% "fall" from about mid-2022).

During the reporting period, government debt in American currency  increased by 2.2% or $248.9 million - from $11 billion 294.6 million  to $11.543.5 billion, and in drams - by 95.3 billion drams or 2.1% -  to 4 trillion 476.7 billion drams. 84.9% of government debt was  raised at a fixed interest rate.  External debt (Armenia's debt  obligations to international organizations and foreign states, funds  received from the issue of Eurobonds) in dollar terms decreased by  $134.3 million (2.3%) - to approximately $5 billion 816.3 million, in  dram terms - by 153.1 billion drams or 6.4% - up to 2 trillion 255.6  billion drams.  At the same time, domestic debt increased both in  dollars and in national currency: by $383.2 million (by 7.4%) - from  $5 billion 343.9 million (2 trillion 163.2 billion drams) to $5  billion 727.1 million (2 trillion 221 billion drams).

The Central Bank's debt also decreased: in dollars by 4.3% or $23.8  million, from $550.7 million - up to $527 million, in drams - from  222.9 billion drams to 204.4 billion drams. The size of loans issued  under government guarantees decreased from $77.3 million or 31.3  billion drams by the end of 2023 to $75 million or 29.1 billion  drams.

By the end of April this year, the share of domestic debt in  government debt increased from 47.3%  to 49.62% by the end of 2023,  and dram debt increased from 45.9% to 48.5% by the end of last year.   Good debt is repaid debt

For January-April 2024, the volume of financing the budget deficit  through net borrowing amounted to 32.6 billion drams (287 billion  drams for the entire 2023, and the annual program for 2024 is 490.8  billion drams). 69.5 billion drams were raised from internal sources  (net proceeds from the placement of government treasury bonds), 36.9  billion drams from external sources, with an annual plan of 350.8  billion drams and 140 billion drams, respectively.

146.5 billion drams out of 345.1 billion planned for the entire 2024  (256.4 billion drams in 2023) were allocated to service the  government debt (payment of interest rates).  According to the  government debt repayment schedule until 2054, in 2024 Armenia will  have to allocate approximately $800 million to repay and service the  government debt (excluding the debt of the Central Bank of Armenia),  formed by the end of April this year, and more than $2 billion in  2025, about $1.6 billion in 2026, the next year - $1.4, the amount  will be about $1.6  billion in 2029, - almost $1.8 billion in 2031,  and - approximately  $1.4 in 2033.

Creditors of Armenia

The largest creditor (external loans) of the Armenian government  remains the World Bank - the International Bank for Reconstruction  and Development and the International Development Association account  for 37.6% of the RA government debt. The second largest creditor is  the Asian Development Bank - 19%, the Eurasian  Development Bank is  the third - 8.1%, followed by the International Monetary Fund - 6.1%,  and the European Investment Bank - 3.1%. External loans from the EU  accounted for 1.6% of the external debt, the International Fund for  Agricultural Development - 1.1%, the OPEC Fund for International  Development - 2%, the EBRD - 0.9%.

Russia is the leader among major creditor countries of the   government's external debt - 6% (6.2% by the end of 2023), followed   by Germany - 5.2%, Japan - 2.9%, France - 5.5%, China - 0.4%, and the  USA -0.2%.

Forecasts of financial authorities

Notably, according to the Ministry of Finance, in 2023 Armenia  increased its public debt by 11.4% or $1 billion 207.6 million - up  to $11 billion 845.3 million. During the reporting period, government  debt in American currency increased by $1 billion 208.3 million or by  12% - from $10 billion 086.4 million by the end of 2022 to $11  billion 294.6 million, and in drams - by 602.3 billion drams or 15.2%  - up to 4 trillion 571.9 billion drams.

According to the law "On the State Budget of the Republic of Armenia  for 2024", the public debt by the end of this year will reach 5  trillion 314 billion drams (50.5% of GDP), instead of 4 trillion 659  billion drams expected by the end of 2023 (49.3% of GDP), and 4  trillion 659 billion drams actual for 2022 (49.2% GDP). The  government's debt will amount to 5 trillion 082.9 billion drams  (48.3% of GDP) or $11 billion, 892 million, against 4 trillion 446.1  billion (47% of GDP) or $10 billion 910 million, expected at the end  of 2023 and 3 trillion 969.7 billion drams or $10 billion 086 million  - for 2022 (46.7% of GDP). In 2024, 805.2 billion drams will be  required to repay and service the government's debt, of which 483.0  billion drams will be debt repayment, and 322.2 billion drams will be  interest payments. 

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