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Armenia's state debt on its way to $7B

06 October 2017 [16:42] - TODAY.AZ

By Azernews

By Rashid Shirinov

Every month the state debt of Armenia continues its steady growth and the country’s government is unable to stop this baleful trend.

Armenia will complete the year with the state debt of $6.7 billion, the country’s Finance Minister Vardan Aramyan has recently told local journalists.

The official noted that Armenia’s state debt amounted to $6.259 billion by the end of August this year, and he did not exclude that it will exceed $7 billion next year.

Meanwhile, the data by the country’s National Statistical Service shows that Armenia’s state debt grew by $58 million in August alone. Thus, Armenia’s debt is increasing monthly, but the well-being of the country’s population is not improving. One third of Armenia lives in poverty, according to statistics, and this indicator is not decreasing for many years. In addition, the unemployment rate in Armenia is highest in the CIS area.

This suggests that the government of the country continues to spend the borrowed loans for its own needs, but not for improving the social and economic situation in Armenia.

Armenian Economist Vilen Khachatryan has commented on the country's high debt rate in his interview for Aravot.

“This year there is again a shortfall process, we borrow more than it was planned. This is a policy, which, you could say, is becoming a vicious practice and continues regardless of what is declared at the ministerial level,” the expert said.

He added that this ongoing process and the debt that can exceed the $7-billion threshold mean that compared to previous years, Armenia will cross the 60-percent-of-GDP threshold, and the issue of the debt threshold will be once again raised at the Armenian Parliament.

“We have not come to this yet, but everything leads to this indicator,” Khachatryan said.

Answering the question of whether it will be more complicated to service a $7-billion debt, Khachatryan said: “Of course, yes. The debt burden in the form of principal and interest on an annual basis already equals to some $300 million, and in subsequent years, in the face of growing debt, it will be even more serious burden for the government.”

Given the huge state debt, the Armenian government should have fixed the situation in the country’s economy long ago. The state debt was slightly above $3 billion in 2009, but now the figure rapidly approaches $7 billion.

However, the Armenian authorities turn a blind eye to the problem, saying that if they stop taking debts, it will lead to a decline in the country’s economy. The continuation of borrowing money from abroad will anyway lead to a default in the country sooner or later.


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