YEREVAN, October 12. /ARKA/. Armenia’s overall public debt at the end of September 2016 stood at $5.6 billion, having increased by 2.2% from the previous month, Arshaluys Margaryan, the head of a ministry of finance department in charge of pubic debt, said to ARKA. Of that amount $5 billion is owed by the government. It increased over the month by 4.9% or $240.4 million.
According to Margaryan, Armenia is still among the countries with the lowest debt burden. To substantiate, he cited several indicators, which are used by supervisory authorities to assess the debt risk. One of them is the current debt, which is set by many countries at 12%. For Armenia, this is a benchmark indicator set at 15%, Margaryan said.
According to the Ministry of Finance, 73.7% of the government debt is long-term liabilities, 22.5% is mid-term liabilities and 3.8% is short term liabilities.
He added that the interest rates on loans are another very important indicator in assessing the risk of government debt. The risk is bigger if the rates on the bulk of loans are floating According to him, basically, floating rates are set on loans from international donors.
He added that the Armenian government may ask the international donors to provide loans with fixed rates and the government did so several times. According to the finance ministry, fixed-rate loans account for 88.5% of loans, while loans with floating rates comprise 11.5%.
According to Margaryan, Armenia’s state debt is sufficiently diversified. “We have loans in all currencies that exist in the international basket of currencies,” – he said. For example, the government debt in Drams makes 18.3% of the overall debt, in foreign currency – 81.7%, including 36.4% in USD, 32.5% in SDR and 7% in euros.
As of September 30, the average interest rate on government-borrowed loans was 4.9% and the average maturity period was 9.3 years.
In the first 9 months of 2016 the government used 177.5 billion drams of borrowed funds and 104.8 billion from domestic sources to finance the budget deficit. It also spent 73.3 billion drams to pay interests on borrowed loans.
According to the Ministry of Finance, Armenia’s national debt by the end of 2016 will increase by $789 million to $5.867 billion. In late 2017 it will amount to $6.277 billion. The public debt to GDP ratio is expected to increase from 48.8% in 2015 to 54.1% in 2016 and 55.1% in 2017. -0-
