Armenia's public debt projected to reach $14 billion by 2025

Armenia's public debt is expected to rise from 49.8 per cent to 53.5 per cent of GDP by the end of 2025, an accompanying note to the draft budget for the year says.

This increase will see the debt grow from approximately $12.6 billion to $14 billion, Caliber.Az reports citing Armenian media.

The budget deficit is anticipated to be 609.4 billion Armenian drams (about $1.57 billion), which represents 5.5 per cent of GDP, with plans to reduce it to 3.0 per cent in the medium term.

Finance Minister Vahe Hovhannisyan noted that expenditures on servicing the state debt will climb from 11.2 per cent to 11.3 per cent of total budget expenditures, amounting to around 393 billion Armenian drams (over $1 billion). Meanwhile, the average interest rate on the debt is projected to decrease slightly from 7.6 per cent to 7.5 per cent.

The government plans to increase the share of external borrowings in the debt structure from 50.3 per cent to 52.3 per cent through the issuance of Eurobonds. In 2025, Armenia intends to redeem a $500 million Eurobond issued in 2015; however, the Ministry of Finance has already repurchased part of this bond, reducing overall costs.

Additionally, a new Eurobond issue for $500 million is planned, and the government aims to secure $600 million in loans to bolster the budget. The outlook suggests that public debt will stabilize at around 54.6 per cent, with no further increases anticipated beyond that point.

By Vafa Guliyeva