The government, during its November 15 session, approved the draft law on ratifying the loan agreement titled “Program for Fiscal Stability and Financial Markets Development – Subprogram 2” between Armenia and the Asian Development Bank (ADB).
According to the justification, the agreement aims to implement the “Law on the State Budget of Armenia for 2024” and fund the budget deficit. The deficit is expected to amount to 482.9 billion AMD in 2024, with 450 million USD planned to be financed through budget support loans.
To address the deficit, the Armenian Ministry of Finance has initiated the process of attracting a budget support loan of approximately €89.5 million from the Asian Development Bank. While such financial support is vital, questions remain about the efficient management of these funds.
Critical Perspective
Although the ability to attract external financial resources is commendable, the government’s approach to managing these resources has often been criticized. Despite multiple loan agreements being touted as crucial for “sustainable development” and “budget support,” citizens still fail to see tangible improvements in their daily lives. Complaints persist regarding the lack of transparency in fund allocation and the potential for corruption within these projects.
Large-scale budgetary loans should not only address fiscal deficits but also deliver noticeable socio-economic benefits. However, the current administration’s policies often fall short of achieving these goals, undermining public trust and failing to address Armenia’s long-term development needs.
