Armenia currently has a public debt of more than 14 billion dollars. Since 2018, when Nikol Pashinyan assumed the post of Prime Minister and formed a government, the national debt has doubled, writes “Hetk”.
State debt is one of the constant topics of the government-opposition debate.
Since the expenses of the state budget are more than the revenues, that is, the taxes collected from citizens and businesses, the state borrows money to be able to fully meet the expenses of the given year.
In this way, the national debt of Armenia has been accumulating and getting heavier for years.
The debt has increased not only under this, but also under the previous authorities. During economic shocks, Armenia relied more on debt. This happened in 2020 as well, when the economy collapsed under the conditions of the pandemic and the Artsakh war, and little money came into the budget.
“Okay, we didn’t want to say it, let’s say it. We took weapons. We raised weapons. We bought weapons out of debt, because we needed them a lot and at once. … Let’s go and demonstrate,” Prime Minister Nikol Pashinyan announced in the National Assembly on November 13, 2025, responding to questions about why the state debt has increased.
According to him, it was also affected by the epidemic of 2020. “Don’t you know that there was Covid? We took a loan so that the country can overcome Kovid during the war.”
However, the debt increased not only during the war and pandemic, but also in the following years. Even in 2022 and the following years, when Armenia became a transit country for the trade of the West and Russia and recorded high economic growth, it received and sent away thousands of refugees from the Russian Federation.
“The general logic is this: we borrow in order to invest in our future development, so that in the future we can increase our incomes faster than the expenses related to the debt, than the debt itself,” RA Finance Minister Vahe Hovhannisyan said in a conversation with “Hetk”.
Has Armenia diverted its debt to weapons and overcoming covid, has the debt burden decreased, as the authorities declare?
There are different numbers and different interpretations on both sides of the medal
The national debt of Armenia is the sum of internal and external debts.
As of the end of January of this year, almost half of Armenia’s total debt is foreign debt: 7.2 billion dollars, of which 6.7 billion dollars is the government’s debt, and the rest belongs to the Central Bank of Armenia.
The external debt of the government is largely the loans that Armenia takes from international organizations and various countries, such as the World Bank, the Asian Development Bank, France, Russia, etc.
And the domestic debt is currently 7.4 billion dollars or 2.8 trillion drams. The state owes that amount to citizens and legal entities. They bought government bonds, that is, they lent money to the state with the condition of getting them back with additional interest after some time.
It is important to note that a small part of the state debt is the debt of the Central Bank, the rest is the debt of the Government. The Ministry of Finance decided to separate the debt of the Central Bank and not include it in the state debt, presenting it as an internationally accepted standard. And in fact, by calculating in this way, the size of the state debt decreases.
But since the debt of the Central Bank was always calculated in the state debt, it is also included in the graph we presented. Even if it is not included, the growth of the debt is not mitigated.
Domestic debt has been growing much faster in recent years. The state has decided that it is safer this way. it is issued and redeemed in Armenian drams and is free from the risk of foreign exchange fluctuations.
Since 2018, the domestic debt has increased by 6 billion dollars, the external debt by 1.5 billion dollars.
Manipulation with incomplete information. the debt burden has not decreased
The authorities are trying to dispel people’s worries about the state debt.
Economy Minister Gevorg Papoyan even uses incomplete information for this purpose.
“Recently, I have been receiving a lot of letters from you, comments on social media pages, and worries about what we will do, how did it happen that the foreign debt of the Republic of Armenia became 12 billion dollars? The foreign debt of the Republic of Armenia is not 12 billion dollars. The foreign debt is 5 billion 962 million dollars. And those people who spread the number of 12 billion are either not informed, or they do it on purpose, they manipulate it,” after Papoyan’s statement in February 2025, the professional community and the media quickly reacted.
Talking only about the external debt, without even mentioning the internal debt, Papoyan is actually misleading himself.
Meanwhile, as we have seen, domestic debt is not only inferior to foreign debt, but its servicing is more expensive. In other words, the interest rates are higher.
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Disclaimer: This article was contributed and translated into English by Chalian Meline. While we strive for quality, the views and accuracy of the content remain the responsibility of the contributor. Please verify all facts independently before reposting or citing.
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