Armenia raises national debt ceiling

20.12.2017 18:05
Armenia raises national debt ceiling

YEREVAN, December 20. /ARKA/. A set of amendments passed today in the second and final reading to Armenian laws related to the state budget and the national debt, provide for three national debt ceilings - 40%, 50% and 60% of the GDP.

According to finance minister Vardan Aramyan, the amendments clarify the principles of fiscal policy regarding public finance management and, with the help of additional legal norms, provide for more regulated and flexible processes in the preparation and implementation of the state budget.

According to the minister, under the 40% national debt ceiling government’s capital expenditures should exceed the budget deficit. In his words, this logic underlies the state budget for 2018. Under the 50% ceiling the need to ensure the growth of current expenditures is added to the previous requirement. Under the 60% ceiling the approaches are even more toughened, and current expenditures are tied to domestic revenues.
The minister recalled that under the current law if the level of public debt exceeds 50% of GDP, then next year’s budget deficit should not exceed 3% of the average GDP over the previous three years.

Opposition Yelk and Tsarukyan factions in the parliament voted against this document. Naira Zohrabyan from the Tsarukyan bloc said they oppose the attraction of additional loans because they would increase the already high level of public debt.

"These amendments provide the government with the opportunity to attract new loans, thereby increasing the financial burden on the Armenian economy. Next year, the amount of per capita state debt will exceed $2200, which is unacceptable, "Zohrabyan said.

According to the National Statistical Service, Armenia’s overall state debt at the end of September 2017 stood at $6.307.9 billion, having increased by 0.76% or $48 million from the previous month. By the end of this year it is expected to reach $6.245 billion against $5.849 billion in 2016. -0-

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