Finance ministry rules out issuing Eurobonds/ attracting additional debt anytime soon
YEREVAN, MARCH 20, ARMENPRESS. Arshaluys Margaryan, head of the state debt management department of the finance ministry, rules out issuing Eurobonds in the near future.
Speaking to ARMENPRESS, Margaryan denied reports that the finance ministry will issue the Eurobonds till July. According to the official, there are two reasons for this, firstly there is no need for it, and secondly, even if there was any need, it would have taken a long time. But at this moment there is no need for it, because last year the state debt-GDP ratio had already exceeded the 50% threshold, and the budget deficit cannot be greater than 3% of the GDP.
Meaning, according to Margaryan, the country cannot take more debt than this.
“Even if there is great desire to do so, it would require to first of all changing the law. Currently the law has two restrictions. The main one is not to exceed the 60% threshold, but before that, there is a warning saying if you pass the state budget-GDP ratio 50% threshold, then you cannot have a budget deficit greater than 3%. Under the legislation it is possible to have a deficit up to 7.5%, however when the debt exceeds 50%, it is cut down to 3%. That’s the reason that we got down from the last year’s almost 6% deficit to 3%. Meaning we cut the volume of deficit twice, which isn’t quite smart, however that’s what the law required, and we adhered to it”, Margaryan said.
The finance ministry official says it would be smart to issue the next set of Eurobonds during the first repayment of the state budget, since in that case the debt won’t increase and wont have an impact on the deifict. Meaning it can happen in 2020.
Margaryan also said they don’t think about attracting additional debt, because taxes began to be normally collected.
“The tax collection also exceeds our expectations”, Margaryan said.