Whom the country owes and how much?
As of December 31, 2016, Armenia’s national debt totaled US$5,93billion, whereas in the same period of last year it made US$5,07billion. In other words, country’s national debt increased by approximately US$900million (16,9%) during 2016. At the same time, from September 30, 2016, within the period of the new government’s activity, the national debt increased by US$737million. All the aforesaid data have been provided by the Armenian Finance Ministry.
By the end of 2016, the share of external debt in Armenia’s gross national debt totaled U$4,79billion, i.e. 80,85%.
Despite the fact that country’s national debt ration to GDP doesn’t’ exceed the permissible limits – 60%, according to the International Monetary Fund (IMF), the most important indicator for national debt risk assessment is its ratio to the export volume. According to this indicator, Armenia has long exceeded the stability threshold. In 2016, the ration of external debt to the export volume in Armenia made 295%, instead of permissible 200%.
As Lragir.am reported, the year 2016 didn’t turn out to be successful for Armenia: country’s economic growth made 0,5% instead of projected 2,1%; there was a drop in money remittances (transfers) and foreign investments over the year, whereas the national debt increased due to the negative external impulses.
Loans obtained from international organizations have the biggest share in Armenia’s external debt structure-84%. The International Development Association (IDA) was Armenia’s largest creditor in 2016, accounting for 32,6% of Armenia’s external debt.
In addition, Armenia also owes to the International Bank for Reconstruction and Development (IBRD)-17,7%; the Asian Development Bank (ADB) -14,9%, as well as the International Monetary Fund (IMF)- 3,8%.
The funds obtained from those organizations were spent on the development of local economy and infrastructure, recovery of the energy system, rehabilitation of the border section of Armenia-Georgia highway of regional importance, construction of interstate roads, rehabilitation of the municipal roads in Gyumri city, creation of regional disposal sites in Kotayk and Gegharkunik provinces, construction of Vedi reservoir.
Japan is Armenia’s largest creditor country, which accounts for 7,1% of Armenia’s external debt. The list of other huge creditor countries also includes: Germany (3%); France (2,4%); the Russian Federation (1,5%) and the USA (0,6%).