Armenia attracts loan to fill 2023 budget gap 19 years of indebtness starts

At a meeting on March 23, the Armenian government approved the signing of an agreement with the International Bank for Reconstruction and Development to attract a loan in the amount of 92.3 million euros to finance the budget deficit.

As Caliber.Az reports, citing the Armenian media, the funds will be used to finance the deficit mentioned in the law on the state budget for 2023.

Relevant actions aimed at mitigating the effects of climate change, strengthening equality and developing human capital, improving the efficiency of the justice system and combating corruption have been outlined as a necessary condition for the provision of budgetary assistance.

The loan is provided with a maturity of 19 years with a five-year grace period at a fixed interest rate (6-month EURIBOR) plus a floating spread (updated by the Bank quarterly). The indicative interest rate established before the negotiations was 3.492% (2.822%+0.67%).

Loan servicing payments must be made every six months - on June 15 and December 15. The repayment of the principal amount will be carried out from June 15, 2028, to June 15, 2041, in equal instalments (3.57% of the loan amount), and the last repayment on December 15, 2041 (3.61%).