Armenian government's financial condition is stable - Minister
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YEREVAN, February 12. /ARKA/. Armenian Finance Minister Vahe Hovhannisyan characterized the situation with the government's finances as quite good in an interview with the Public Television.
"The state of finances is characterized, first of all, by stability. We have had a stable situation in the last two years. The financial buffers created for emergency management also play their role," Hovhannisyan noted.
The minister noted that the state budget for 2024 earmarks a Reserve Fund of unprecedented volume.
"There is also a stabilization account, which shold funds in the amount of at least 1% of GDP; currently there is AMD 100 billion in it," Hovhannisyan said.
He was asked about the increase of Armenia's state debt by AMD 1.5 trillion (i.e. 50%) compared to the end of 2018 and its impact on the GDP potential.
The minister reminded that the state debt indicators are assessed not in absolute figures, but in relation to GDP.
"At the end of 2023, the size of the state debt was less than 50% of GDP, more precisely about 48.4%. This is considered a low, stable, manageable level," Hovhannisyan said, adding that this amount has been fully invested in capital expenditures, which increases the growth potential of the economy.
According to him, calculations by international organizations show that this potential has increased from 4% to 5.5% in recent years.
"In 2022 and 2023, especially at the end of 2023, we saw an increase in interest rates on local debt. However, we have recently seen a decline in this rate, in parallel with the Central Bank lowering the refinancing rate. This is peculiar to many countries, not only Armenia. However, the size of our state debt is such that we can consider it manageable. It is also connected with another indicator - the share of loans with fixed interest, which reaches 84%," the Minister explained.
According to the National Statistics Committee, as of December 31, 2023, the total public debt amounted to more than $11.84 billion against almost $10.64 billion a year earlier. About $6.5 billion of the public debt was external debt, while domestic debt exceeded $5.34 billion. --0—
