Armenia's Public Debt Is Not Worrisome, But Taking New Loans Is Not Recommended

The current stability of Armenia's debt does not raise concerns, as noted by Evgeny Vinokurov, chief economist of the Eurasian Development Bank and the Eurasian Stabilization and Development Fund, in response to a question from Sputnik Armenia at the Second Eurasian Congress.

“Significant increases in public debt levels were made in the fight against the pandemic. Our models (of the Eurasian Stabilization and Development Fund) show that by 2026, the ratio of public debt to GDP will decrease (by 1.5% over five years) due to the growth of gross product. Armenia's debt stability does not provoke serious concerns,” Vinokurov stated.

However, according to him, even by 2026, the level of public debt will be higher than it was before the pandemic (57.2% compared to 53.7% in 2019).

Armenia borrowed last year from capital markets up to 3.8–3.9% of GDP. This is a very successful interest rate, and in this regard, financial and monetary authorities “deserve applause.”

Additionally, a loan was taken from the IMF at concessional rates. This mix of concessional and market resources is acceptable.

“Between 2022 and 2024, repayments on loans will average 5.9% of GDP, which is generally acceptable... However, further increases in debt must be seriously questioned,” Vinokurov emphasized.

It is noteworthy that as of November 2021, Armenia's public debt reached $9.2 billion.

The Second Eurasian Congress is being held in Moscow on December 2, organized by the Eurasian Development Bank with support from the Russian government.

This year, the main topics discussed at the congress are aimed at uncovering the potential of business, enhancing the role of public-private partnerships, key intergovernmental infrastructure projects in the fields of transport and logistics, water and energy complexes, and ensuring food security, as well as priority issues in achieving sustainable development goals, mechanisms for “green” financing, ESG projects, and the digital transformation of states.