By Rashid Shirinov
The state debt of Armenia continues to grow at a rapid pace, and now there is a possibility that the government will have to raise the bar of the critical level of state debt earlier than previously expected.
A month ago, the Armenian authorities assured that this was not going to happen and the bar could be upgraded only next year, if necessary. However, the situation has worsened.
Zhamanak newspaper reports that the government intends to amend the law on state debt before the end of the year. Under the amendment, Armenia will be able to attract more debt if needed. Under the current law, the state debt of Armenia cannot exceed 60 percent of GDP, but this bar will most likely be overcome by the end of this year. In particular, loans will be needed in case of a military situation or global and regional economic crises that may affect the country.
As of the end of August this year, Armenia’s state debt amounted to $6.259 billion. The National Statistical Service of Armenia notes that the public debt grew by about $58 million in August alone. Thus, Armenia’s debt is increasing monthly, but the well-being of the country’s population is not improving. One third of Armenia lives in poverty, according to statistics, and this indicator has not been decreasing for many years. In addition, the unemployment rate in Armenia is the highest in the CIS area.
“This year we see underfulfillment and we are borrowing more than planned. This is a policy that turns into a deplorable practice and continues, regardless of what is declared at the ministerial level,” economist Vilen Khachatryan has told Aravot.am.
Recently, Armenian Finance Minister Vardan Aramyan said that the country will end the year with a state debt of $6.7 billion. Answering the question if it is possible that next year the public debt will cross the threshold of $7 billion, the minister said that this is quite possible.
Thus, the state debt of Armenia was slightly above $3 billion in 2009, but now the figure rapidly approaches $7 billion. Although the state debt is growing every month, this does not affect the well-being of the population in a positive way. How long should people tolerate this?
Rashid Shirinov is AzerNews’ staff journalist, follow him on Twitter: @RashidShirinov
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