Armenian crisis steps farther

/By AzerNews/

By Laman Sadigova

Pessimistic forecasts predicts Armenia a hard year as the country expects no positive perspectives in the upcoming year.

Armenia's state debt relative to its GDP was 48.3 percent in 2015 but will reach 49.4 percent in 2016, according to data approved by Deputy Finance Minister Pavel Safaryan in the Armenian Parliament.

Against the backdrop of a chronic recession in the Armenian economy, the country continues to take out multi-million-dollar loans. Part of the funds are spent on the repayment and servicing of previous debts, part of it is allocated to impossible projects, and the largest part is stolen.

The post-Soviet country has seen its foreign debt rise by roughly 300 percent over the past seven years to 46.6 percent of its 2015 GDP of more than 4.5 trillion drams (US$9.63 billion), the country’s Central Bank reported. The International Monetary Fund has already expressed concern over the debt burden.

The local media have reported that the government plans to borrow another $909 million next year.

Safaryan also said that the Armenian Central Bank's share of next year's debt will be 4.2 percent, the same as in 2015.

The domestic debt has also increased, as it was 6 percent in 2015 but will be 6.6 percent in 2016.

The deputy minister remarked that the public debt was close to 50 percent. These numbers only emphasize the deepening crisis in Armenia, while the government does nothing to rectify the situation.

Safaryan claimed Armenia's economic growth in 2016 would be “more modest” than it is now. His words sound ironic because Armenia has witnessed no improvement in any sphere for a very long time. In fact, the population is starving and sinking into debt, while the government spends vast amounts of money on constitutional amendments and military matters.

It can be said that the Armenian economy is still afloat due to foreign credit, which the government uses solely to maintain and strengthen its power and to avoid a massive collapse of the national currency.

Many experts believe that the only way Armenia can improve its situation is to drop its aggressive policy toward Azerbaijan and release the territory that is globally recognized as belonging to Azerbaijan. These steps will lead to the recovery of the country's currently dead trade. Armenia has relied exclusively on Russia for a very long time, but now, as the northern giant is suffering a heavy crisis and Western sanctions, Armenia has no backup.

Meanwhile, Armenia's population continues to peter out, also due to the reduction in money transfers -- the only source of income for many of the country's residents.

The criminal regime governing the country and dominating every sphere of life has thwarted all efforts to modernize and boost the economy and improve the people’s standard of living.