ARMENIA WILL HAVE TO PUT ASIDE $478 MILLION IN 2013 TO REPAY ITS FOREIGN DEBTS

ARKA
Jan 19, 2010

YEREVAN, January 19, /ARKA/. An ex-prime minister of Armenia said
Monday the country will have to put aside $478 million in 2013 to
repay its foreign debts, a sum which is twice as much as Armenia’s
defense spending for 2010.

Speaking at a news conference Hrant Bagratian, who served as prime
minister in former president Levon Ter-Petrosian’s administration,
said servicing its foreign debt last year cost Armenia $74 million,
in 2010 it will cost $115 million, $129 million in 2011, $280 million
in 20102 and $479 million in 2013. He blamed the government for failing
to have these mandatory payments in account when drafting its policies.

Hrant Bagratian argued that the government should have turned to
local, not international lending organizations, for assistance to
mitigate the fallout from the economic crisis. He said this would
have allowed the government to avoid falling into foreign dependence
and would help stimulate domestic economy.

‘If the government had sought loans from Armenian commercial banks,
half of interest profits would have returned as income taxes to the
budget,’ he said, warning also against mounting domestic debt due to
issuance of huge volumes of government bonds.

According to the official figures of Armenia’s National Statistical
Service, at the end of Q3, 2009 Armenia’s gross foreign debt rose by
5.6% from Q2 to almost $4.7 billion. Some 48.3% or $2.271.04 billion
were owned by the government, 12.8% or $600 million by fiscal and
credit regulatory bodies and 19% or $898 million by commercial banks.

According to the statistics, 82.8% of the overall debt are long-term
debts. At the end of Q3 Armenia’s gross international reserves dropped
by $47.38 million from Q2 to $2.517.23 billion. As a result Armenia’s
net foreign debt rose by $296 million to stand at $2.179.25 billion
at the end of Q3.