Debt interest rates have risen for Armenia – Alpha Economics

The issue of Armenia’s growing public debt, particularly in recent years, has become the focus of widespread attention. On the one hand, there has been a fairly rapid increase in its absolute value, and on the other, questions arise about how effectively the government is using borrowed funds. What is the situation with public debt, and what is the essence of the problem?

As of the end of October this year, Armenia’s public debt stood at about $14.2 billion, with the government responsible for nearly $13.7 billion of that amount. The Central Bank accounts for about $510 million.

Although public debt decreased slightly compared to the end of September (the September figure was $14.195 billion), it is clear that this is a very small reduction, and overall the debt continues to grow. For comparison, Armenia’s public debt at the end of October 2024 was $12.6 billion, and according to consolidated data for 2017, it was $6.7 billion.

The challenge is not only the absolute size of the debt but also its management—specifically, the debt-to-GDP ratio. In this regard, the situation today is somewhat more favorable: public debt is at what is called the “manageable threshold” relative to GDP. However, the strengthening of the dram certainly plays a role in these statistics. The key management question is how effectively public debt funds are used to ensure long-term sustainable economic growth.