Sun, 8 June
17.1 C
Yerevan
USD: 384.44 RUB: 4.83 EUR: 434.11 GEL: 140.51 GBP: 515.15

Armenia’s public debt cut has twofold effect, according to researcher

YEREVAN, August 6. /ARKA/. “The policy of the new Armenian government is aimed at reducing the country’s national debt,’ Hrant Mikaelyan, a researcher at the Caucasus Institute in Yerevan, said in comments on a government report that Armenia’s external debt has reduced by $120 million over the last 15 months.

In an interview with ARKA news agency Mikaelyan said the first signs of a transition to such a policy by the Ministry of Finance, the Central Bank and other relevant bodies were noticeable since the second half of 2017.

‘This is a very conservative budget policy, and given the growth of budget revenues, there is an opportunity for its implementation,” Mikaelyan said.

On the other hand, according to him, if the government collects more money by exploiting a more intensive tax administration, and spends less, it will adversely affect economic growth because of a reduced turnover.

“Therefore, this policy has a twofold effect. For having less public debt, we will be paying by a lower standard of living or by lower rate of economic growth, ”said Mikaelyan.

At the same time, he did not rule out that a drop in growth rates is possible due to a reduction in capital expenditures, although the trend in optimizing the spending is observed in all sectors, including the armed forces.

“We see that domestic investment — gross capital formation — has declined, including from the government. Thanks to this, the government saves money, does not increase public debt, and can even partially cover it, ”said Mikaelyan

Mikaelyan pointed out that the government is using part of the saved money to raise public sector salaries and pensions.

“Most of these changes will take effect from January next year. This means that in the future it will be more difficult to cover public debt, ”he said.

Mikaelyan stressed also the importance of a certain reduction in the state debt now, since next year Armenia will have to allocate large amount to pay its foreign debt.

In essence, as the economist noted, the government now makes a certain reserve so that next year it is easier to take new loans to cover debt payments to the tune of about $800 million. -0-

spot_img

POPULAR

Insurance market of Armenia is in embryonic state

Insurance market of Armenia is in embryonic state

Arka news agency’s ranking of most profitable Armenian banks in 2019

In 2019, Armenia-based commercial banks earned a total of 78.8 billion drams in net profit, up from 56.4 billion drams they had earned in 2018, according to ARKA news agency's ranking of the most profitable commercial banks in the fourth quarter of 2019

Ranking of Armenia’s most profitable banks in 2024

ARKA news agency has released a ranking of the most profitable commercial banks in Armenia in 2024.

Top ten Armenian banks by size of lending in 2019

In 2019, the overall loan portfolio of Armenia's banking sector grew by 16.4% to 3.572.2 trillion drams

LATEST NEWS

spot_imgspot_imgspot_img