Armenian Government to Take On $320 Million in New Loans

(Horizon Media / YEREVAN)—The Armenian government plans to take on a combined $320 million in new loans. The draft agreements have been included on the agenda of the government’s August 6 meeting.

Under the first agreement, the Asian Development Bank will provide Armenia with a $150 million budget-support loan for a 15-year term at a variable interest rate of 4.58 percent.

The first component of the program is intended to strengthen fiscal management, public debt and financial risk management policies, as well as the sustainability of infrastructure investments. The second component seeks to improve the government securities market, while the third aims to expand the range of financial instruments and investors and increase corporate transparency.

A second loan agreement, worth $170 million, has been concluded with the International Bank for Reconstruction and Development. The funds are expected to support investment, trade liberalization, greater competition, and more environmentally sustainable and resilient economic growth. The loan will have a 28-year term and an annual interest rate of 3.9 percent.

As of the end of March 2026, the Armenian government’s external debt had exceeded $6.7 billion. Its combined domestic and external debt stood at more than $14.1 billion, while the Central Bank carried an additional debt of approximately $500 million.

Although the government presents the new borrowing as a means of supporting reforms and economic growth, the additional loans will further increase Armenia’s already substantial debt burden, raising questions about long-term fiscal sustainability and the growing cost to future state budgets.