If We Were in a Bad Situation, No One Would Lend Us Money: Deputy Minister of Finance

We determine the appropriateness of expenses during budget discussions; that is when we decide which expenses to incur and which not to. In this regard, the accusations of incurring purposeless expenditures are not clear to me.

This was stated by the Deputy Minister of Finance Vahe Hovhannisyan during the discussion on ratifying the letter-agreement regarding the use of the funds of the standby program signed between the Republic of Armenia and the International Monetary Fund on January 11 and January 18, 2022.

“When you say that ‘the debt is not taken during good times,’ I can suggest another option—it is actually during good times that we can take on debt, because if we were in a bad situation, no one would lend us money,” he noted.

According to Hovhannisyan, the state budget deficit of Armenia in 2022 amounts to 236 billion drams, while they are implementing capital expenditures of 351 billion drams. The loan is precisely intended to cover the 236 billion deficit.

“It can be said that all the resources we are attracting are not funding our current expenditures in any way, but rather, we are investing in Armenia’s infrastructure in order to later increase our GDP potential,” emphasized the Deputy Minister of Finance.

He also stressed that it is logical to hold the thesis that this government's debt could be settled by the next government. He highlighted that the political cycle is five years, while loans are sometimes secured for 20 years.

“Even now we are repaying the loans that were taken by previous administrations, and surely many have doubts about the effectiveness of those loans,” the Deputy Minister declared.