David Sargsyan: Armenia not considered poor country anymore

The sale of Eurobonds was aimed at attracting money into Armenia from international markets, rather than at mobilizing savings in the domestic market, Finance Minister David Sargsyan said at the briefing following the Armenian government’s session today.

He reminded those present that it was the first time that Armenia issued Eurobonds outside the country. In addition, the minister said that Armenia is not considered a poor country anymore, but ranks as a middle-income country. It means that Armenia will not receive loans on favorable terms from the International Monetary Fund, the World Bank, and other international institutions. For example, these institutions previously gave Armenia loans with a 10-year grace period, but since 2007-2008 the number of such loans has declined.

“For this reason Armenia has decided to enter international market,” David Sargsyan said.

Besides, the private sector needs funds for business development, but according to the rules of the international financial market, if a state is not a participant in the given market, then the private sector attracts funds on unfavorable terms and at high interest rates. In addition, the issue of Eurobonds may diversify the country’s sources of finance.

The finance minister underlined that as the global economy gradually overcomes the crisis, interest rates will start to rise. For this reason a number of developing countries, including Armenia, made a decision to issue Eurobonds now, and not in 1-2 years.