Armenia to go through "Great Depression" in 2021

By Trend

Under the interstate agreement, Moscow will allocate $1.15 billion to Yerevan to cover the debt generated as a result of arms supplies to Armenia during the Karabakh war in autumn 2020, Trend reports citing Russian media.

“Moreover, Armenia is also expected to borrow $400 million from the International Monetary Fund (MF) under the stand-by arrangement. Over the past two years, Armenia's public debt has increased to $8 billion, and taking into account the generation of a new credit burden, it will reach $9.5 billion this year,” Doctor of Political Science Vahe Davtyan.

“Armenia's GDP is $18.8 billion, which in itself testifies to extremely dangerous processes for Armenia. According to international financial institutions, as well as a number of key “think tanks”, for countries with a low level of institutional development, the optimal size of public debt shouldn’t exceed 37-38 percent of GDP. Taking into account the institutional crisis in the country, it can be said that 2021 will be the beginning of the "Great Depression" for it, which can only be overcome by freeing the militant dilettantes who have seized power and by forming an anti-crisis government of technocrats,” Davtyan said in an interview with the Realist news agency.

According to the World Bank, in 2020, the Armenian economy contracted by 8 percent. In 2021 and 2022, its growth maybe 3.1 percent and 4.5 percent, respectively.