Some economic experts in Armenia are starting to worry: they believe the Armenian government is taking on too much foreign debt without clear means to finance it.
For some, Armenia’s debt picture is conjuring up images of Greece, though admittedly on a much smaller scale. The tiny South Caucasus country’s $4.6 billion in foreign debt is just a sliver of that which EU-member Greece ran up (360 billion euros, or just over $400 billion, at its height), and Yerevan’s predicament has far fewer potential implications for the international financial system. But on a basic level, some observers in Yerevan are questioning whether the Armenian government is following a Greek pattern by using infusions of outside cash to cover fiscal gaps and postpone economic reforms.
Armenia’s foreign debts have increased by roughly 300 percent over the past seven years, and now account for 46.6 percent of its 2015 Gross Domestic Product of over 4.5 trillion drams ($9.63 billion), according to the country’s Central Bank. The International Monetary Fund already has expressed concern about that debt load.
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Gayane Abrahamyan is a freelance reporter and editor in Yerevan.