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Future Generations to Inherit Outgoing PM Abrahamyan’s Legacy of Debt

When outgoing Armenian Prime Minister Hovik Abrahamyan first took office in April 2014, Armenia’s government debt (also known as public debt) stood at US$4.6 billion.

During his tenure as prime minister it has reached US$5.4 billion. This is an increase of 18%.

For clarification government/public debt is the debt owed by a central government. It can be classified as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders).

As of July 31, 2016, Armenia’s external debt stood at $4.493 billion and its internal debt was $891 million.

Breaking the government debt down, during Abrahamyan’s tenure as prime minister, external debt rose by 16.2% and internal debt by 28.6%.

Sure, the recent economic downturn in Russia played a part in Armenia’s debt increase, but it’s not the sole, or primary factor. Armenia’s economy remains overly sensitive to external factors and this is due to a host of domestic factors.

So who are Armenia’s largest external creditors.

The World Bank tops the list. Armenia owes the WB $1.675 billion, or 37.5% of the country’s overall external debt.

Other relatively large creditors are the Asian Development Bank (9.6% of external debt) and the IMF (9.5%).

The question remains where has all this money gone? Who has benefited?

Hovik Abrahamyan’s legacy is one that Armenian taxpayers will be paying for quite some time.

If they only could see some tangible signs of improvement in their daily lives, such a financial pill would be a little less hard to swallow.

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