Armenia on threshold of debt crisis

According to Jubilee Debt Campaign experts, Armenia is on the threshold of the debt crisis. The Jubilee Debt Campaign is a global movement demanding freedom from the slavery of unjust debts.

Jubilee’s analysis defines countries as at high risk of a government debt crisis if they have net debt higher than 30% of GDP, whereas Armenia's GDP is $12,537 billion and its state debt is $9,933 billion.

It is believed that the decline in the economy or a sharp rise in interest rates could trigger an economic crisis in a number of countries with a high risk of a debt crisis – Armenia, Greece, Georgia, Lebanon, Macedonia, Tunisia and others, 1news.az reports.

The head of the analytical center Alternative, Tatul Manaseryan, told Vestnik Kavkaza that the risk of economic debt crisis doesn't threaten Armenia.

"Firstly, for many years Armenia has been a country with an average external and internal debt. I believe that given Armenia's membership in the Eurasian Economic Union, these estimates are politicized and in particular are caused by its partnership with the Russian Federation. In this case, Armenia is below the limit set by the methodology of the International Monetary Fund (IMF), it recorded 60% of external debt in relation to GDP. And I believe that it is inappropriate to say that this is the highest figure of debt load," the economist said.

"I believe that Armenia has an acceptable level of debt, and such estimates are inappropriate, because they are aimed at artificially reducing the rating of Armenia, as was done last year in relation to the Armenian banks. I am convinced that, although we will have minimal growth, I don't predict a recession in 2015, and do not think that these forecasts are justified," the head of the analytical center Alternative concluded.

The director of the Institute of Oriental Studies of the National Academy of Sciences of Armenia, Ruben Safrastyan, agreed with Tatul Manasaryan.

"I think that, though Armenia has a rather large external debt, I do not see a danger of a debt crisis: the country regularly pays its debt and has the ability, if necessary, to obtain loans from its EEU ally Russia," Safrastyan noted.