Armenia’s public debt remains sustainable, fiscal consolidation needed to reduce it - IMF

16.02.2016 15:27
Armenia’s public debt remains sustainable, fiscal consolidation needed to reduce it - IMF

YEREVAN, February 16. /ARKA/. Armenia’s public debt remains sustainable, although risks are elevated, Hossein Samiei, the newly-appointed IMF Mission Chief to Armenia, said in an exclusive interview with ARKA News Agency.

“In particular, external debt is a significant source of vulnerability, and the repayment of the 2013 Eurobond in 2020 increases sharply the government’s financing needs,” he said. “Alternative scenarios and stress tests indicate that an adverse growth shock would have the largest impact on debt dynamics and government financing needs.”

To reduce the public debt level, he said, fiscal consolidation should start as early as 2016.

“The consolidation should focus on revenue increases—addressing tax policy and revenue administration gaps—rather than on spending cuts to protect growth enhancing social and capital expenditures,” Samiei said in his interview. “This is why the approval of the new Tax Code, currently under public consultation, and which includes several revenue enhancing measures, is so critical.”

According to the National Statistical Service of Armenia, the country’s public debt reached $5 071 million in late December 2015 after growing 14% or by $629.5 million over one year.

Armenia’s foreign debt has grown 30% since December 2010 and 13.8% since late December 2014 to $4 309.5 million in late December 2015.

The country’s internal debt amounted to $761.4 million in late December 2015 after growing 16% over one year. --0----


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