Armenia has closed the 2016 year end with 5.9 billion USD public debt, informed Vardan Aramyan, the Minister of Finances during the discussion of the 2016 budget agenda in the Parliament, adding that Armenia’s external debt has significantly increased in 2015-2016. During those years the loaned external debt has accounted for 900 million USD: “It was almost equal to the reduction of the transfers. That is, if we think theoretically now, if we had not taken a loan, it would have had two influences. We would have not only economic low indicators, but even economic decrease would be possible. This is why taking an external debt was favorable”: substantiated Vardan Aramyan.
By the way, the domestic debt has grown within Armenia’s 2015 total debt: “The experience of the international economy is an evidence that the debt crises mostly come from external debt. A lot of people even say by mistake that the economy of the Russian Federation had a domestic debt crisis in 1998. It was not a domestic debt crisis, it was an external debt crisis. Why is domestic debt more reliable than the external one? The first reason is that you give the domestic debt to your resident and the money circulates within your economy. Two influences exist in paying the external debts: firstly the money flows out, secondly, it also claims towards the currency.”
From the nominal perspective, according to the minister, the growth of the debt is not an issue and the government of Armenia will continue taking debt: “There are indicators of debt, which give you signals whether you are a bearer of a burden of average, low or high debt. The international society, the investors included, attentively follow those indicators. Speaking of debt, we should not take debt-GDP indicator solely, but we should look by the ensemble of various indicators, where we are. Here important is not to take a debt, but to regulate the relative indicators. We should take certain debt for the economy to grow. If we reach a point where the economy grows faster than debt, it will mean that we have achieved the result desired. Yes, you should take a debt, but at the same time, you should endeavor for the going expenses to be correct, for it to bring forth an increase of productivity.
Nelly GRIGORYAN
