Armenia’s debt burden soars tenfold, former PM warns

Armenia’s state debt has reached $12.338 billion, and the financial burden of interest payments has surged tenfold over the past seven years, according to former Prime Minister Hrant Bagratyan.

At a press conference, Bagratyan refuted recent claims made by Economy Minister Gevorg Papoyan, who asserted in a video message that the government's external debt stands at only $5.96 billion and accused opponents of spreading misleading figures for political gain, Caliber.Az reports referring to Armenian news agencies.

“The Minister of Economic Affairs himself does not know what he is talking about,” Bagratyan stated. “We are not talking about foreign debt. We are talking about the fact that the country’s debt is $12 billion. Of that, $6 billion is external debt, which is serviced at 1%, and $6 billion is internal debt, which is serviced at 14%. The interest on the internal debt is 14 times higher.”

Bagratyan stressed that it’s crucial to look not just at how much the state owes, but also at how much the government spends annually on servicing this debt.

“As of today, we spend 1 trillion drams on debt servicing. Half of it goes to servicing interest, and the other half goes to repaying the principal,” Bagratyan continued. “For comparison, in the last years of Serzh Sargsyan's rule, we spent only 100 billion drams on debt servicing. The expenses have increased 10 times. So, in this sense, the debt burden has grown 10 times. I am not interested in how much I owe. I’m interested in how much I have to pay every month. And that amount has increased 10 times. I don’t think the current Minister of Economy, with his background, deeply understands this.”

Bagratyan also pointed out that the official figures from Armenian media confirm that the total debt of the Armenian government is approximately $12.338 billion (as of the end of December). Of this, $6.388 billion is internal debt, and $5.950 billion is external debt.

In response to the claims made by the Minister, Bagratyan concluded: “The interest burden on the internal debt has grown 14 times higher compared to external debt, and the government is now paying significantly more towards debt servicing than it did just a few years ago.”

By Tamilla Hasanova