YEREVAN, July 16. / ARKA /. An Armenian economist has brushed away today allegations that Armenia lies in a debt danger zone, where an economic downturn or a sudden jump in interest rates on world debt markets could lead to disaster.
Speaking to a news conference, Professor Ashot Tavadyan said Armenia is out of the debt danger zone
and its public debt is manageable. According to an IMF forecast, at the end of 2015 the ratio of Armenia’s public debt to GDP will make 53.1%.
Tavadyan recalled that under the law, Armenia’s state debt should not exceed 60% of GDP. In terms of money it is about $6 billion. ‘This means that the government may continue to borrow,’ Tavadyan said.
Armenia’s total public debt in late May stood at $4.630.2 billion, a decrease of 0.6% from the previous months, however, if compared to the beginning of the year, it was higher 4.2%. Armenia’s external public debt at the end of May stood at $3.946.9 billion, having dropped by 0.52% from the previous month.
Of that amount about $3.512.5 billion were owed by the government. The figure was down by 0.44% from late April. Central Bank’s external debt was worth $434.4 million.
Armenia’s domestic debt at the end of May stood at $683.2 million, down 0.99% from the previous month. Of that amount about $595.6 million were owed by the government to resident buyers of bonds.
The debt in foreign currency stood at $83.5 million. Also $2 million were owed as loans and borrowings and another $2 million as domestic guarantees.
On June 22 by a vote of 63 to 32 an extraordinary session of parliament adopted in the first reading a bill that calls for replacing the notion “state debt” by “government debt.” Under Armenia’s law public debt cannot exceed 60 percent of the Gross Domestic Product (GDP). The government-designed bill suggests leaving the 60-percent limit only for the government debt, exempting the Central Bank from the limit.
Tavadyan believes that the ceiling of the public debt ratio to GDP should be lowered from 60% to 50%. -0-
