Armenia’s state debt approaches critical threshold
By Abdul Kerimkhanov
Armenia has become closer to the critical debt level of 50 percent of the GDP.
As of May 31, 2019, the country’s national debt amounted to $6.92 billion. In April, this figure was $6.9 billion, according to Armenian media reports.
The data on Armenia’s state debt is an indicator of its doubtful solvency, indicating an unsustainable debt burden. Armenian economists consider this ratio as dangerous. They warn the Armenian authorities that the budget of the country will not be able to service such huge debts.
Economist Vardan Bostanjyan told Armenian media that the consequences of the accumulation of public debt are extremely dangerous for Armenia, adding that soon, the country will pass the dangerous threshold of public debt.
Despite Armenia received credit funds and directed them to solve development problems, the authorities have not been effective in this area over the years, he added.
Bostanjyan expressed bewilderment over the fact that the Armenian government has not yet established appropriate mechanisms for the effective use of these funds.
The economist considers the government program does not have any vision and important guidelines for the country.
Meanwhile, the level of financial outflows from Armenia continues to be high. After the change of power, this process not only did not stop but has even intensified.
The data published by the Armenian Central Bank show that in January-April 2019, individuals took out $397 million only through the banking system. The average monthly amount reaches $100 million, which is quite a serious figure for the economy and financial system of such a small country.
The amount of remittances abroad in the form of transfers increased by almost $30 million or exceeded 8 percent compared to the same period of 2018.
The level of activity of outgoing private transfers was high, especially in April. During this month, as many as $110 million left Armenia through the banking system, which is more by $17 million compared the same period of last year. So, the growth exceeded 18 percent.
There are no official statistics on the amount of cash individuals take out of Armenia. According to various estimates, its amount is equivalent to the bank transfer volumes.
Thus, all the promises of the new Armenian authorities to improve the standard of living in the country turn out to be nothing but dust in the people’s eyes.
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Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94
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