They are going to attract the next loans with 2 projects not reported in the agenda of the regular session of the government.

According to the project developed by the Ministry of Finance, it is planned to receive a budget loan of 150 million dollars from the Asian Development Bank, which will be provided for 15 years, with a floating interest rate of 4.58.  The first component of this credit agreement is intended to support the strengthening of fiscal management, public debt and financial risk management policies, as well as strengthening the stability of infrastructure investments. The second component implies the improvement of the state securities market, the third, the expansion of the range of financial instruments and investors, as well as the transparency of companies.

The second loan agreement was signed between the International Bank for Reconstruction and Development․ the amount of the loan is 170 million dollars. These credit funds are planned to be directed to the liberalization of investments, trade and the promotion of competition, to ensure greener and more resistant growth. The term of the loan is 28 years, the annual interest rate is 3.9 percent.

In other words, they are taking on new DEBT to manage, for example, the risks of the public debt, or to direct the expansion of the range of investors, while the policy pursued by Nikol Pashinyan’s government in this direction is not exemplary at all.․ 2 big investors are currently under political persecution. are detained.

Let’s remind: the total volume of the state debt of the Republic of Armenia, according to the latest data, has crossed the border of 14 billion dollars. It is noteworthy that after the well-known velvet revolution of 2018, the burden of public debt has almost doubled.

And in that debt burden, the foreign debt, which, according to the latest index,  6.7 billion dollars it also comes from loans provided by international donor organizations, such as the World Bank, the Asian Development Bank, etc.

Davit Ananyan, member of the management board of the Unity Wings party, general director of the D-ES Consulting Group company, former head of the RA State Revenue Committee (SRC), candidate of economic sciences., referring to the regular credit involvements 168․amto the questions, noticed that though there is a practice of attracting credit funds to plan budgetary risks, but the control over it should be strengthened.

“It is assumed that it was taken to mitigate certain risks. There are certain sectors related to the economy, which suffer losses related to these restrictions, and, most likely, it aims to implement additional subsidies not provided for in the budget. Davit Ananyan mentioned.

In general, in response to our clarifications about the rapid growth of the debt burden, the economist emphasized that, from a professional point of view, the public debt, according to the debt/GDP ratio indicator, is still within manageable limits, but there are problems with the quality of the economy’s structure.

“And the reason is that industry is not the dominant force in the structure of the economy. And if at the moment it is even industry, then it is mining, which is due to the increase in copper prices in international banks, the existence of quite high copper prices. In other words, even if the industry today has some vitality (we are not talking about the processing industry, but the mining industry, which is based on the export of concentrates and not of higher value finished products), the economy is still not good in its structure, although it has a certain size. Therefore, if we are talking arithmetically, the debt is manageable from a macro perspective, but qualitatively, the future is rather murky.” he elaborated.

Speaking about another factor, the vague economic prospects caused by Russian restrictions, and in response to our observations, referring to the estimates of some officials-experts close to the government, that the damage to the RA economy will be 1-1.5 percent under the conditions of total economic restrictions by the Russian Federation, Davit Ananyan noted:

“For example, the Security Council of Russia published indicators of 15.1 percent economic and 26.3 percent industrial decline, as well as 14 percent inflation. These, it seems to me, are within the limits of extreme estimates, but what is the methodology behind the numerology presented by the Russian Council of Ministers, or what are the goals of our Russian partners, what calculations did they make, how much will they increase the price of gas?․․․ there are still uncertainties that are not known to us. I think that the judgments of the Central Bank and the government can be thoughtful and optimistic, and, for example, those of the partners of the Russian Federation, thoughtful and pessimistic. And in that amplitude there are quite a few economic indicators, which are still unknown. We cannot say which judgment is closer to the truth, which is realistic.” he said.

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