In a statement, the Finance Ministry said that the dollar-denominated bonds are repayable in 10 years at an annual yield of 7.1 percent. It said strong interest attracted by them from foreign investors testifies to their “long-term trust” and “underscores the stability of Armenia's macroeconomic and financial systems.”
The statement did not explain why the government’s previous Eurobond issue four years ago carried a much smaller yield: almost 3.9 percent. It said ministry officials will meet the media in the coming days to answer “many questions among the public” raised by the government’s latest borrowing operation.
Some analysts have warned that it will further push up Armenia’s public debt that has more than doubled during Prime Minister Nikol Pashinian’s time in office. The debt stood at over $12.8 billion as of last month.
Babken Tunian, a senior pro-government parliamentarian, sought to dispel such concerns over the weekend, saying that much of the borrowed money will be used for buying back previous 10-year bonds issued in 2021. He did not give any figures, though.
Finance Minister Vahe Hovannisian announced plans for the fresh Eurobond issue in late December. He did not say whether they are connected with the government’s failure to meet its tax revenue target set by the 2024 state budget. The shortfall was expected to total about 200 billion drams ($500 million).
The worse-than-expected tax collection appeared to reflect slowing economic growth in the country. The Armenian economy was projected to grow by 5.8 percent last year, down from 8 percent in 2023 and 12 percent in 2022. The government has forecast a 5.1 percent growth rate for 2025.