YEREVAN, OCTOBER 4, ARMENPRESS. The Government of Armenia plans to cut expenditures in a number of directions, Minister of Finance of Armenia Vardan Aramyan told the reporters.

“I have to say that 6 billion AMD will be cut from subsidies. It is conditioned by the fact that a new lease will be signed with the operator of the water supplies”, Minister Aramyan said, adding that expenditure cuts will take place in other spheres as well, such as state apparatus or agriculture.

The Minister referred to the issues of external debt, presenting a number of indexes. According to preliminary forecasts, the external debt of the Government will amount to 4.4 billion USD in 2016. Overall, the state debt will amount to 5.8 billion USD.

“People often ask the question which is the acceptable Debt to GDP ratio. I can say that 60% is the acceptable level, but it is not necessarily dangerous when you exceed that threshold. The structure of the debt is very important. The overwhelming part of our debt is comprised of soft loans”, the Minister of Finance said, explaining that if a country continuously records negative economic growth, even a low level of external debt can cause the investors to withdraw their money from the country. “I don’t think we have an uncontrollable situation in this context”, he concluded.