Armenia's Domestic Debt Surpasses External Debt for the First Time

According to the results for the first half of 2024, the internal debt of the Armenian government has exceeded its external debt for the first time (50.7% / 49.3%). Overall, the government debt has increased by 3%, while the debt of the Central Bank of Armenia has decreased by about 8%. This information is reflected in the report by the Ministry of Finance of Armenia. Reports Sputnik Armenia.

As of the results from 2023, the government's debt relative to GDP was 48.4%, while the results for the first half of 2024 have yet to be calculated.

Regarding loans from external sources, the Armenian government has reduced their volume, while increasing government bonds. In the first half of 2024, domestic bonds represented 49.2%, foreign loans 37.2%, and Eurobonds 13.4%. The volume of foreign loans has decreased by about 5%, accounting for roughly 40% of the total government debt.

In the first half of the year, the structure of foreign lenders has not changed significantly; the largest lender remains the World Bank (37.8%). The share of concessional loans in the bank’s loan portfolio is gradually decreasing, as Armenia is no longer considered a country in need of concessional loans according to international financial organizations’ standards. Therefore, the concessional loans reflected in our country’s statistics have mostly been taken out before 2020–21, and they are gradually being repaid.

Among other lenders, the Asian Development Bank’s share in the first half of this year was 19.6%, the European Bank for Reconstruction and Development, including the Eurasian Fund for Stabilization and Development, accounted for 8.3%, the International Monetary Fund held a share of 5.3%, and the European Investment Bank made up 3.2%. Four other organizations, namely OPEC (Organization of the Petroleum Exporting Countries), the European Union, IFAD (International Fund for Agricultural Development), and the EBRD accounted for a combined share of 5.6%. It is noteworthy that EBRD also significantly finances the private sector in addition to the government.

Regarding loans from other countries, which total 19.9%, the largest share belongs to the Russian government at 6%, followed by France at 5.4%, Germany at 5%, and Japan at 2.8%.

As for the debt of the Central Bank of Armenia, it pays this from its own resources rather than the state budget.