Armenia's foreign debt to hit $5 billion
By Mushvig Mehdiyev
Armenia's external debt is expected to take a high jump, as the parliament plans to discuss receiving loans from the international organizations.
The parliament's permanent commission on foreign relations will discuss seven international agreements on new loans, standing at $260 million in total, according to Haykanak Zhamanak, a local newspaper.
Armenia's total external debt was revealed to be $4.2 billion as of the end of this year. Forecasts by several experts reveal that the figure will exceed $5 billion next year.
The loans from international bodies are planned to be invested in energy, water supply, as well as services fields. Moreover, the 2015 budget says that Armenia will borrow money as much as it needs to pay its debts.
It means that the government has developed a plan to repay old debts at the cost of newly borrowed loans. It could be a better way to diminish the burden of foreign debts, but in a country like Armenia it will have no effect given the widespread corruption.
Armenia currently has a large amount of debts to foreign financial institutions, whilst its domestic banks listed up the citizens as the main debtors.
A non-investment and speculative business atmosphere reigns in the post Soviet country based on the ratings by the influential financial forecasters Moody's and Fitch.
MP Nikol Pashinyan had earlier likened Armenia to a peasant while commenting on the foreign debt rate, saying: "Armenia resembles a peasant, who gets a loan from one bank to repay its debts to another bank."
Armenia is grappling with a deep financial hassle, characterized by currency fluctuation and disabled economy. Several economic experts call the ongoing situation hopeless, while the foreign experts forecast a domino effect in Armenia's economy.
One more interesting fact is that Armenia has recently been ranked as the world's third country in terms of the armament, according to a report by the Bonn International Center for Conversion. The report has subsequently sparked mixed reactions in Armenia where there is a threatening economic and financial scourge.