Finance Minister Vahe Hovhannisyan addressed the growth of Armenia’s national debt during a press conference presenting 2025 results. “Yes, the debt has grown from one billion to another but there are countries with trillions in debt. Why are we focused on this billion? We should be looking at proportions,” he said, as quoted by Panorama.am.
He noted that in 2018, Armenia’s debt-to-GDP ratio stood at 52%, whereas it has now decreased to 48%, indicating improved debt servicing capacity. However, he did not comment on the fact that this decline is partially due to the appreciation of the national currency, following years when the ratio had approached 60%.
Hovhannisyan added:
“The expenditures we’ve made through debt have yielded results, enabling us to increase revenues and continue servicing our growing debt without issues.
I haven’t seen serious objections in Parliament or the media suggesting any program was pointless or asking why large amounts were spent on something, especially using borrowed funds,” he stated.
He emphasized that borrowed funds are not used for current expenditures but exclusively for capital investments: “Our rule is that capital expenditures must exceed the deficit. While our projected deficit is 4.5%, capital spending is at 6%. We can say all the debt is going toward capital projects,” said the minister.
He specified that most capital expenditures are directed toward defense, road construction, and school building.
According to 2025 results, the ratio of domestic to external debt stood at 53.4% to 46.6%. Compared to the end of 2024, the share of domestic debt increased by 1.6%, while the share of external debt decreased by the same amount.
