Armenia’s debt ‘burden’ grows

/By AzerNews - Sara Rajabova/

Armenia’s debt ‘burden’ is getting heavier day by day. The government intends to take more debt next year.

The Armenian government is mulling to take debt in the amount of approximately $909 million. The Armenian media reported that this is clear from the “Program on medium-term expenditure on 2016-2018 years" approved by the government.

Under the program, the national debt would be 1, 999 trillion drams ($ 4.2 billion) in the beginning of 2016. According to government’s predictions, then in late 2016, this figure would reach $ 2, 431 trillion drams ($ 5.1 billion). The difference amounts to 432 billion drams, which, at current exchange rate is $909 million.

The Armenian media reported that the reality is crueler as Armenia’s national debt is growing much faster than the government predictions.

This comes as recently it has been reported that the national debt of Armenia, whose economic crisis is reaching dangerous level, is actually much more than in the official data.

Armenia’s "Haykakan Zhamanak" newspaper didn’t rule out that the actual state debt might exceed 60 percent of GDP, which, according to the Armenian legislation, is maximum admissible level for state debt.

The state debt is projected by the state budget to reach $4.2 billion at the end of this year. However, Armenia’s Deputy Finance Minister Atom Janjughazyan has recently said state debt will stand at about $4.9 billion at the end of this year.

If to add the $909 million, it turns out that at the end of next year, Armenia’s state debt will amount to $5.8 billion, instead of $5.1 million predicted by the government.

In 2008, Armenia’s state debt was $2.13 billion, in which the share of foreign debt accounted for $1.82 billion. The economists say that Armenia’s state debt has increased by 2.5 times, while the external debt grew by 300 percent since 2008.

If to take into account the current economic crisis in the country that has been aggravated during the past years, this can be dangerous for the Armenian economy.

After the recession in Russia, the economic situation in Armenia has worsened due to the decrease in money transfers to the country. Money transfers from Russia to Armenia decreased by 40 percent. This, consequently, led to a significant drop in government’s revenues.

These factors are pressing the Armenian government to take decisive measures to prevent bankruptcy in future. The corrupt regime in Yerevan, however, seeks to maintain its power rather than pull the country out of the economic crisis.