Armenia on the Brink of a 'Debt Trap': Economic and Political Crises to be Joined by a Social One – Hakobyan

The head of the Economic Affairs Committee of the National Assembly, Vahe Hakobyan, representing the 'Armenia' faction, addressed the economic issues in parliament. He stated that the tragic events of the 'shock year' 2020 have left a significant mark on the economy, with the economic crisis compounding the existing political crisis, while now a social crisis is soon to follow.

“In 2020, we ended with a 7.5% economic decline and found ourselves in an economic crisis that was compounded by the political one. I assure you, another crisis is about to emerge, and that is the social crisis, because the ruling political force has adopted such economic policies that address current spending by increasing state debt. It resembles a situation where a not-so-foresighted citizen takes out a loan to pay off another loan, and then takes out a third loan, thus falling into a 'debt trap.' We are now standing on that threshold, the threshold of a 'debt trap' since our GDP-to-government-debt ratio has long surpassed 60% and is approaching 70%. This is compounded by an inflation rate of 5.7%. I must mention that inflation recorded in June alone was 6.5%,” Hakobyan remarked, predicting that under this situation, Armenia could find itself in a risk zone according to IMF standards, which poses a series of dangers.