YEREVAN, December 19. /ARKA/. Armenia’s Ministry of Finance held December 19 a discussion on the government’s plan of borrowings for 2020, attended by financial market participants and representatives of international financial institutions.
According to Samvel Khanvelyan, the head of a Finance Ministry department, the borrowing program for 2020 has been developed in accordance with the guidelines and targets laid down in the government’s strategic debt management program for 2020-2022.
According to the forecasts, laid down in the state budget of Armenia for 2020, government debt at the end of the year will amount to 3.419 trillion drams ($7.177 billion ), by 162 billion drams ($341 million) more compared to 2019.
In 2020, 448.7 billion drams will be required for paying off and servicing the government debt, of which 280.6 billion drams for paying off the debt, and 168 billion drams for paying the interests. The average weighted interest rate on the debt will amount to 5.2%, and the cost of servicing it will make 2.4% of GDP.
Artak Marutyan, the head of the accounting and servicing department of the public debt management of the ministry, said the government will not attract budget assistance loans to finance the budget deficit in 2020. He said this is the first time the government will do so.
According to the ministry, only those government bonds whose repayment is scheduled for September 30, 2020 in the amount of 46.5 billion drams ($97.7 million) are subject to redemption For these purposes, mainly funds generated from f operations on foreign currency bonds in 2019 will be used.
At the same time, the balance of debt on foreign currency government bonds will not grow and will remain at the level of one billion drams with two issues in circulation that are due to be paid off in 2025 and 2029.
Armenia’s budget for 2020 projects 4.9% growth and f 4% (± 1.5%) inflation. The government plans to collect 1.69 trillion drams in revenue and spend 1.85 trillion drams; the projected budget deficit is 160.7 billion drams.
According to the latest statistics, the total public debt of Armenia at the end of September 2019 stood at $7. 051.177 billion, having increased by $78.169 million from the previous month. The external public debt amounted to $5.543.690 billion and the domestic debt to the equivalent of $1 507.487 billion.
According to the Ministry of Finance, the public debt of Armenia in 2019 will make 50.3% of GDP to reach $ 6.94 billion.
On September 26, 2019, Armenia placed on the international capital market eurobonds totaling $500 million with a 10-year maturity and 3.95% coupon yield. Prior to that, two issues of Eurobonds were made. The first issue was on September 19, 2013 in the amount of $700 million with a 6% annual yield and maturity of 7 years until March 30, 2020. The second issue was made on March 26, 2015 to the tune of f $500 million, 7.15% yield and a maturity of 10 years until March 26, 2025. -0-
