{"id":127942,"date":"2020-04-04T17:53:39","date_gmt":"2020-04-04T17:53:39","guid":{"rendered":"https:\/\/armbanks.am\/2020\/04\/04\/249266\/"},"modified":"2024-12-15T13:40:55","modified_gmt":"2024-12-15T13:40:55","slug":"fitch-ratings-projects-that-armenias-government-debt-may-rise-from-53-6-at-end-2019-to-59-2-of-gdp-in-2020","status":"publish","type":"post","link":"https:\/\/armbanks.am\/en\/2020\/04\/04\/127942\/","title":{"rendered":"Fitch ratings projects that Armenia\u2019s government debt may rise from 53.6% at end-2019 to 59.2% of GDP in 2020"},"content":{"rendered":"\n

YEREVAN, April 4. \/ARKA\/. <\/strong> Armenia\u2019s general government debt is projected to rise from 53.6% at end-2019 to 59.2% of GDP in 2020 before falling back to 56.0% in 2021, upward revisions of 9.4pp and 7.4pp, respectively, since our last review, and well above the current ‘BB’ median of 46.5%, Fitch Ratings said in a report.<\/p>\n\n\n\n

\u2018We assume some drawdown on central government deposits this year (by 0.8pp to 5.0% of GDP), use of budget support available under Armenia’s IMF precautionary Stand-By Arrangement, and domestic debt issuances. A high share of government debt is foreign currency-denominated (79% versus the ‘BB’ median of 56%) giving rise to exchange rate risk,\u2019 it said.<\/p>\n\n\n\n

According to Fitch ratings, the coronavirus shock has increased external risks to the Armenian economy. Fitch forecasts the current account deficit remains high, at 8.5% of GDP in 2020 and 8.1% in 2021, compared with the 2018-2019 average of 8.8% and the current ‘BB’ median of 2.9%.<\/p>\n\n\n\n

Allowing for statistical discrepancies, the actual deficit could be closer to 5% of GDP, but only around a third of this is covered by non-debt creating capital inflows. The current account will be negatively affected this year by a collapse in tourism (which contributed 0.7pp to last year’s balance), the fall in prices of commodities and lower remittances from Russia.<\/p>\n\n\n\n

\u2018We expect this to be largely offset by import compression and lower energy costs. Fitch forecasts that net external debt will increase to 52.9% of GDP in 2021 from 46.7% in 2019, well above the ‘BB’ median of 19.4%, and the relatively high bank deposit dollarization ratio, at 52%, adds to risks.\u2019<\/p>\n\n\n\n

Armenian Minister of Economy Tigran Khachatryan stated on April 3 that the country’s government envisages an increase in its own financial expenses, if necessary, by increasing the debt, \u201cbut this should be within a reasonable framework.\u201d
\nAccording to Armenia\u2019s National Statistics Committee, the country\u2019s total public debt at the end of December 2019 amounted to $7.324.167 billion. The external public debt stood at $5 789.729 billion. -0-<\/p>\n","protected":false},"excerpt":{"rendered":"

Armenia\u2019s general government debt is projected to rise from 53.6% at end-2019 to 59.2% of GDP in 2020 before falling back to 56.0% in 2021, upward revisions of 9.4pp and 7.4pp, respectively, since our last review, and well above the current ‘BB’ median of 46.5%, Fitch Ratings said in a report<\/p>\n","protected":false},"author":1,"featured_media":172077,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","tstyn_error":""},"categories":[12139,9216],"tags":[15837,15645,2177,12344,13548,12351],"class_list":["post-127942","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy-en","category-news","tag-armenia-2","tag-fitch-2","tag-fitch-ratings","tag-gdp","tag-government-debt","tag-ratings"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t