Significant Increase in Per Capita Debt Burden in Armenia: Each of Us is $400 More in Debt

The Director of the Institute for Energy Security, economist Vahe Davtyan, writes on his Telegram channel: “It turns out that alongside the reported economic growth of 8.7% in 2023, the per capita debt burden in Armenia has significantly increased. Specifically, it has risen from $3600 to $4000. In simple terms, our debt has increased by $400 each.

The problem, perhaps, lies in the fact that Armenia continues to implement an economic policy characteristic of a 'third world' country, primarily based on trade and services, without long-term strategic goals, and without the prospect of industrial capacity creation and market expansion (this is why, by the way, conventional large-scale energy production is being replaced by smaller alternatives in recent years).

Thus, in 2023, the largest growth in Armenia's GDP structure was recorded in wholesale and retail trade. Moreover, negative dynamics have been observed in the mining industry, extraction of mineral resources, and agriculture.

In a context dominated by such a 'take-and-sell' model, it is entirely logical that no serious investment program has been implemented in Armenia in recent years, and no significant infrastructure project has been realized. With the Armenian economy increasingly generating modest additional value, the only alternative left is the increase in debt, along with all the associated security and social risks.”