YEREVAN, January 21. /ARKA/. Armenian Finance Minister Vahe Hovhannisyan isn’t concerned about the country’s growing public debt.
According to the Ministry of Finance, Armenia’s total public debt as of December 31, 2025, amounted to $14,531.3 million, compared to $12,842.2 million the previous year, an increase of 13.1%.
The minister believes that the debt-to-GDP ratio should be taken into account, not so much by the growth of the public debt. He noted that in 2018, the public debt-to-GDP ratio was approximately 52%, and is now at 48%.
“Yes, the public debt is growing and has grown from one billion to another. But we’ve talked about this thousands of times. There are countries that have trillions,” Hovhannisyan said at a final press conference on Wednesday.
According to the minister, the capacity to service the public debt has increased. “The expenditures we made using debt have yielded results that have enabled us to increase our revenues to the point where we have no problem servicing this increased debt,” he explained.
Hovhannisyan also noted that international partners, when assessing fiscal sustainability, view the changes as positive.
He cited the improved Fitch outlook as an example, noting that the agency, being a conservative institution, has documented a reduction in risks.
The international rating agency Fitch Ratings revised the outlook on Armenia’s long-term foreign currency issuer default rating (LTFC IDR) from “stable” to “positive” and affirmed the rating at “BB-.”
The Finance Minister also recalled that Armenia aims to reduce the state budget deficit to 1% by 2030, explaining that this would effectively translate into a budget surplus. Hovhannisyan previously stated that Armenia’s state budget deficit would not exceed 5% of GDP by the end of 2025, instead of the planned 5.5%, resulting in public debt below the 50% threshold of GDP.
The World Bank’s “Armenia Monthly Economic Update – December 2025” report notes that Armenia’s October deficit of 1.4% of projected annual GDP was twice the total deficit for the three quarters. Furthermore, the cumulative deficit for January-October increased to 2.1% of projected annual GDP, with two-thirds of the deficit realized in October.
Fitch Ratings expects the general government deficit in 2025 to be 5.0% of GDP, below the budgeted 5.5%, but still above the BB category median (3.0%). The agency’s analysts expect the Armenian government to achieve its 4.5% state budget deficit target in 2026, but predict that deficits will be higher than the government’s medium-term target of 3.5% starting in 2027.-0-
