Armenian auditor criticises ineffective use of debt funds

Chairman of the Armenian Chamber of Auditors Nairi Sargsyan has highlighted the severe risks associated with Armenia's $12 billion state debt.

He warned that the current debt burden is exceptionally perilous for the country, Caliber.Az reports citing the Armenian media.

"Approximately 13 per cent of Armenia's budget is allocated to debt servicing. This substantial expenditure diverts critical resources away from vital areas such as national defense, economic development, and social issues, which could otherwise be used to address these pressing challenges," Sargsyan noted.

Sargsyan emphasised that a critical issue is the allocation of debt funds, which are not being invested in profitable sectors capable of generating revenue to repay the debt and provide additional income.

He warned that, without a strategic shift, Armenia may eventually be compelled to compensate for the debt by relinquishing state assets.

He also criticised calls for Armenia's EU membership, arguing that such moves are counterproductive given Armenia's current economic non-competitiveness.

Sargsyan suggested that Armenia is not adequately positioned to integrate into the EU and faces significant barriers to entry.