According to the country’s Statistical Committee, the debt mainly incurred by the Armenian government has risen by roughly $800 million over the past year despite continued robust growth of the domestic economy. It is expected to continue growing next year.
The government will also have to spend more on debt servicing. Nearly 11.5 percent of its budgetary expenditures, projected at roughly 3.5 trillion drams ($9 billion) in 2025, are due to be used for that purpose.
Armenian debt servicing has become more expensive in recent years because of the increased share of the internal debt generated by sales of government bonds and treasury bills. Their market-based interest rates are much higher than those of concessional loans provided to Armenia by the World Bank, the International Monetary Fund and other multilateral lenders.
Tadevos Avetisian, an opposition parliamentarian, expressed serious concern over these figures on Monday. He noted that Pashinian had regularly lambasted the country’s former government for increasing the debt burden before coming to power in May 2018.
“We had a state debt of around $6.4 billion in 2018,” Avetisian told RFE/RL’s Armenian Service.
Garik Petrosian, a senior official at the Armenian Finance Ministry, sought to dispel such concerns. He argued, in particular, that the debt will be equivalent to 53 percent of GDP at end of this year, down from 63.5 percent in 2020 and 60.3 percent in 2021.
“There are no big problems,” Petrosian said, adding that the government is managing the budgetary “risks” involved.
Amid slowing economic growth, the government is aiming for more modest increases in public spending and tax revenue in 2025. Finance Minister Vahe Hovannisian said earlier this month that it has to spend public money more sparingly.