Armenia’s public debt may reach 47.8% of GDP at end-2015
25.01.2016,
17:39
Armenia’s public debt may reach 47.8% of GDP at end-2015, from 43.6% at end-2014, below the 'B' category median of 52%, but above the 'BB' category median of 44%, Fitch Ratings says in its report.
YEREVAN, January 25. /ARKA/. Armenia’s public debt may reach 47.8% of GDP at end-2015, from 43.6% at end-2014, below the 'B' category median of 52%, but above the 'BB' category median of 44%, Fitch Ratings says in its report.
Fitch Ratings has affirmed Armenia's long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B+' with a Stable Outlook. Fitch has also affirmed the issue ratings on Armenia's senior unsecured foreign currency bonds at 'B+'.
According to the report, some 85% of government debt stock is in foreign currency, exposing Armenia to exchange rate depreciation, but it has a long average maturity of 9.7 years and much of it is concessional at low interest rates.
Fitch analysts estimate the budget deficit widened to 4% of GDP in 2015, from 1.9% in 2014 and compared with a budget deficit target of 2.3%.
The deterioration reflected weaker-than-expected growth as well as policy measures to support the economy and social protection, including elimination of the minimum profit tax, reduce the turnover tax rate, extend VAT payment dates on imports from the Eurasian Economic Union and a subsidy to compensate some consumers for the increase in electricity tariffs.
Nevertheless revenues held up well given the magnitude of the fall in domestic demand. However, the government also increased net lending to the economy, representing a quasi-fiscal policy loosening.
The 2016 budget envisages a narrowing of the deficit to 3.5% of GDP, helped by an increase in excise duties in May.
According to the National Statistical Service of Armenia, Armenia’s public debt amounted to $4 813.4 million in late November after shrinking 0.3% over one month.
In the 2016 government budget, the public debt-GDP ratio is projected at 49.4% against 48.3% in the 2015 budget, and foreign debt-GDP ratio is expected to stand at 42.8% in 2016 against 42.3% a year before, and deficit is projected to make up 3.5% of GDP. ($1 – AMD 487.33). ---0----
Fitch Ratings has affirmed Armenia's long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B+' with a Stable Outlook. Fitch has also affirmed the issue ratings on Armenia's senior unsecured foreign currency bonds at 'B+'.
According to the report, some 85% of government debt stock is in foreign currency, exposing Armenia to exchange rate depreciation, but it has a long average maturity of 9.7 years and much of it is concessional at low interest rates.
Fitch analysts estimate the budget deficit widened to 4% of GDP in 2015, from 1.9% in 2014 and compared with a budget deficit target of 2.3%.
The deterioration reflected weaker-than-expected growth as well as policy measures to support the economy and social protection, including elimination of the minimum profit tax, reduce the turnover tax rate, extend VAT payment dates on imports from the Eurasian Economic Union and a subsidy to compensate some consumers for the increase in electricity tariffs.
Nevertheless revenues held up well given the magnitude of the fall in domestic demand. However, the government also increased net lending to the economy, representing a quasi-fiscal policy loosening.
The 2016 budget envisages a narrowing of the deficit to 3.5% of GDP, helped by an increase in excise duties in May.
According to the National Statistical Service of Armenia, Armenia’s public debt amounted to $4 813.4 million in late November after shrinking 0.3% over one month.
In the 2016 government budget, the public debt-GDP ratio is projected at 49.4% against 48.3% in the 2015 budget, and foreign debt-GDP ratio is expected to stand at 42.8% in 2016 against 42.3% a year before, and deficit is projected to make up 3.5% of GDP. ($1 – AMD 487.33). ---0----
