YEREVAN, March 31. /ARKA/. Although Armenia’s public debt grew by 13.9% in 2020 to 67.3% of GDP, it remains within manageable limits, Alexey Kuznetsov, the head of the Country Analysis Center at the Eurasian Development Bank (EDB) said on Wednesday.
According to him, at the end of 2019 the public debt /GDP ratio stood at 53.5%. On average, the public debt growth rate of the Eurasian Development Bank’s member states in 2020 was 8.5 percentage points.
“The debt burden in 2020 increased in almost all countries during the pandemic, but the situation remains manageable,” Kuznetsov said.
According to him, the key factors behind the growth were the need to finance budget deficits and a reduction in GDP caused by decreased income and a drop in economic activity, as well as the cost of anti-crisis measures implemented during the pandemic.
He noted that the debt growth was observed in many EDB member countries. In particular, in Russia and Kazakhstan, the level of public debt is significantly lower than the border target; in Belarus and Tajikistan it is within 50%; a more significant increase was in Armenia and Kyrgyzstan, where they are close to 68% of GDP.
“The situation remains manageable, including due to the fact that a significant increase in the debt burden was due to the attraction of concessional loans. Moreover, most countries in the region are planning steps to reduce budget deficits in the medium term,” Kuznetsov said.
In 2020, Armenia attracted $340 million in fresh loans, the bulk ($300 million) from IMF. At the beginning of 2021, almost 75% of the government debt was in foreign currency. When the level of government debt exceeds 60% of GDP, the possibilities of increasing the current midterm expenditures are limited by fiscal rules.
In early 2021 the government sold Eurobonds in the amount of $ 750 million with a maturity of 10 years and 3.8% yield. Investor demand exceeded $ 2.5 billion. Moody’s has assigned a Ba3 credit rating to the Eurobonds with a “stable” outlook.
According to the National Statistical Committee, the total public debt of Armenia as of January 31, 2021 amounted to $8.024.878 billion, an increase of $56.391 million compared to December 31, 2020. -0-