Ex-minister talks on economic prospects in Armenia

If the overall economic policy is ineffective, any debt becomes risky, former Minister of Industry and Trade of Armenia Karen Chshmarityan said, Report informs. referring to News.am.

Country's Minister of Finance Atom Janjugazyan said that if the state debt reaches $8.5 billion by the end of this year, the ratio of public debt to GDP will be 70 percent.

"Let’s view the country as an economic entity. An economic entity has taken a loan. It cannot direct the borrowed amount to expenses, salaries, produce or create anything, and then borrow an even larger amount to pay off the previous one and re-direct it to expenses. The situation is similar in the case of the state - if it is possible to ensure efficiency, then any debt can be paid off," he noted.

He added that the problem is in the general economic policy.

"That is, the presence of debt itself doesn’t mean that it is bad. Of course, it is good when there are no debts. The debt/GDP ratio is calculated because if the percentage of debt to GDP is small, it means that GDP provides not only the ability to service debt but also use free funds to develop the economy," he said.

Chshmarityan noted that if the current economic decline rate continues for another two months, it is difficult to say what will happen next.

"It will be difficult to understand how all this can be restored. What national economy can we talk about if our national, state interests are threatened?" he added.