WB: Armenia to have no problems with state debt service in coming three
years
YEREVAN, July 4. /ARKA/. World Bank doesn’t think Armenia will have
problems with state debt service in coming three years, Aristomene
Varoudakis, head of the World Bank’s Yerevan Office said at a press
conference on Friday.
He said that the recent credits were extended on quite preferential
terms.
On June 12, Russia transferred $500 million to Armenia as a bailout
credit aimed at supporting the country amid the global crisis.
The World Bank intends to lend $545 million to Armenia for
implementation of new programs and technical assistance and consulting
services.
Besides, International Monetary Fund has enlarged financial assistance
for Armenia to $823 million, and Asian Development Bank intends to
transfer $140 million to Armenia as preferential credits to support
implementation of some governmental programs.
At the same time, Varoudakis said that Armenia’s debt/GDP will surge
from 13% in 2008 to 45% in 2011.
He said that such ratio is too high, especially compared with taxes/GDP
ratio, taking into account that tax receipts make 16 or 17% of GDP.
National Statistical Service of Armenia says taxes, excluding
subsidies, made 13.5% of GDP in Jan-May 2009.
GDP totaled AMD 839356.6 million in current prices, and GDP
index-deflator compared with Jan-May 2008 was 101.4%.
Stressing that foreign debt constitutes the main part of the state debt
and deficit of check account of balance of payments is quite high,
Varoudakis expressed hope that state debt/GDP ratio would start
shrinking gradually to 30%.
Armenia’s deficit of check account of balance of payments amounted to
$256.89 million after reducing 15.4% or by $46.91 million, compared
with the first quarter of 2008.
According to National Statistical Service of Armenia, check account
deficit had 18% in GDP against 19.2% of the 1st Q 2008.
It made 11.6% of the 2008 GDP.
Varoudakis pointed out the necessity to double efforts to intensify tax
flow into the state budget and increase revenue.
He also finds it important to upgrade competitive ability of the
national economy to ensure greater diversification of growth.
It means growth has to be due rather to growth of export-oriented
sectors than construction, he said stressing that this would make it
possible to reduce check account deficit.
The head of the WB Yerevan office thinks that if Armenia manages to
meet these two requirements, there will be no grounds for debt-related
concern.
National Statistical Service of Armenia says Armenia’s foreign debt
reached $1778.8 million or AMD 657.9 billion by March 31, 2009, after
growing 15.3% or by $237.1 million compared with the same date a year
earlier.
Armenia’s national debt grew 12.4% to AMD 96.1 billion. M.V.-0—