449 Billion Dram for Government Debt Repayment and Servicing

The Armenian state budget has earmarked approximately 449 billion dram for government debt repayment and servicing in 2020, of which 281 billion will be allocated for debt repayment and 168 billion dram for interest payments. This was stated by Artak Marutyan, head of the Public Debt Sustainability Department of the Ministry of Finance, during the presentation of the 2020 borrowing program.

“For the purpose of debt repayment and servicing, the state budget has planned around 449 billion dram in 2020, of which 281 billion will go to debt repayment and 168 billion dram to interest payments. Of the 449 billion dram, about 47 percent is allocated to treasury bonds, 17 percent to Eurobonds, while the share of external loans constitutes approximately 37 percent,” said Marutyan.

It is expected that by the end of 2020, the government's average interest rate on debt will stand at 5.2 percent, while total servicing costs will account for 2.4 percent of GDP, remaining at the same level as in 2019.

According to him, as a result of the implemented functions, it is anticipated that by the end of 2020, the outstanding debt from external loans will amount to about 4.4 billion dollars, with the World Bank maintaining the largest share, accounting for 40 percent of the total debt, followed by the Asian Development Bank with a 19 percent share, and the Eurasian Development Bank with 7 percent.

Moreover, bilateral loans will constitute a total of 24 percent, with the largest shares belonging to the Russian Federation and KfW Bank, at 9 and 6 percent respectively.

It is expected that as a result of the transactions carried out in 2020, the unutilized balance of active external loans will be around 940 million dollars equivalent, with KfW Bank holding the largest portion at about 31 percent, followed by the Asian Development Bank at around 22 percent, the Eurasian Development Bank at 17 percent, and the World Bank at around 24 percent.