12:57 - 7.10.2020

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October 7, Fineko/abc.az. The International Monetary Fund is convinced that Armenia is drowning in foreign debts.

ABC.AZ reports with reference to the Center for Analysis of Economic Reforms & Communications that Armenia’s external debt amounted to $11.4 bn at the end of 2019.

It was noted that $5.8 bn of this amount is external public debt.

Thus, at the end of last year the ratio of external public debt to GDP was 42.5%, and external public debt per capita was about $1,900.

According to Center’s calculations, it is predicted that the external debt indicators in Armenia will be even worse this year.

The cause of this is that under the influence of the Covid-19 pandemic, country’s economic activity is expected to decline, the budget deficit will grow, and the national currency will become cheaper.

In the 2nd quarter of 2020 the quarterly economic growth decreased by 13.7% versus the 2019 same term.

As a result, tax revenues decreased and budget expenditures to support economic activity increased, which led to an increase in the share of the budget deficit from 2.25% up to 5% of GDP. The growth of the budget deficit led to the attraction of new debts. In the 1st half of 2020 Armenia's direct external public debt grew by $175 million.