YEREVAN, November 2. /ARKA/. Armenia may increase the public debt, Armenian Vice-Premier Mher Grigoryan told reporters on Monday.
The National Assembly of Armenia began today to discuss the draft government budget for 2021.
Grigoryan said that the draft government budget for 2021 presented at the moment is qualitatively balanced – it is indicated what revenues, what challenges and what expenses are expected.
In his words, the presented project takes into account all factors and has a financial logic – a stable economy and a stable social position.
“However, it cannot be said that martial law did not affect the economy or the budget in any way. Of course, the situation affected the budget revenues. This influence will continue and therefore it is necessary to think about the level of the national debt. But I think that we will find a balance that will allow us to get out of the current situation and neutralize the risks of these challenges, manage them and ensure social and economic stability,” Grigoryan said.
At the same time, he noted that the level of public debt is not as important as the productivity of spending the funds raised and also their purpose.
“Raising debt is not an end in itself for us, and no one is going to resort to this step to realize expenses that are not caused by the situation or the consequences of challenges. It is necessary to follow the comments of the ministry of finance on how the debt will be spent and, based on its results, what additional value we will generate, so that this will naturally allow it to be serviced and repaid,” Grigoryan said.
He noted that in the current situation it is impossible to keep the size of the national debt unchanged, but stressed that the government will lay down effective spending mechanisms.
At the same time, he refrained from specifying the maximum level of increasing the debt burden.
According to Fitch Ratings’ October forecast, Armenia’s public debt will grow from 53.5% of GDP at the end of 2019 to 63.9% at the end of 2020.
According to the National Statistical Committee, the total public debt of Armenia at the end of July 2020 amounted to $ 7,939,525 million, an increase of $ 220,682 million, compared to June. Since the beginning of the year, the total national debt has grown by $ 618,269 million.
The Chairman of the Central Bank of Armenia Martin Galstyan said in September of this year that the ratio of the state debt to the country’s GDP can reach 60% and even higher.
Finance Minister Atom Janjughazyan said earlier that Armenia will increase its debt burden by 260 billion drams because of COVID-19, as a result of which the budget deficit in 2020 could reach 324 billion drams. ($ 1 – AMD 493.6). – 0–
