Armenia in anticipation of default

By Azernews

By Rashid Shirinov

Problems of the Armenian economy seem to have no end. At least, until the current regime stays in power. No wonder that former President of Armenia Levon Ter-Petrosyan recently admitted that his country is facing a serious economic disaster.

“The governing regime is busy with theatrical ceremonies of reforming the government and electoral process, which are clearly aimed at the strengthening its own power rather than at the improvement of the country,” Ter-Petrosyan stressed. “In the near future, our country will face a real economic disaster, hidden under a harmonious title “default”.”

These words of the former Armenian president drew the attention of the country’s authorities and pro-government experts. All of them in one voice began to refute the statments, arguing that the situation is not that bad. However, the facts of the economic crisis are self-evident.

Armenia’s external debt is growing, as well as the budget deficit; economic growth is significantly lower than it was foreseen. More precisely, the state debt of Armenia has already amounted to $5.36 billion as of the end of the first half of 2016. Noteworthy, the forecasted GDP in 2016 amounts to 5.443 trillion drams. Hence, by the end of the first half-year, the national debt of Armenia made up 46.7 percent of GDP, which is quite risky for the country’s economy.

Ter-Petrosyan, warning that Armenia may be completely insolvent in the near future, and not able to pay pensions and salaries of its citizens, is very close to the truth.

Haykakan Zhamanak newspaper reported citing the circles close to the ruling party of Armenia, that the authorities find it difficult to pay the pensions lately, and this process gradually becomes a heavy burden for the state budget of Armenia.

The newspaper mentions that the government should allocate the pensions in the same amount as they are charged from the wages of employees. Until now, the funds of cumulative pensions have received 14.7 billion drams ($31 million), and till the end of this year, the total figure should become 26.76 billion drams ($56 million).

“Every year, it is more and more difficult to the authorities to allocate these funds,” the newspaper reported.