A BRIEF REVIEW OF THE PUBLIC DEBT OF ARMENIA, BELARUS, KYRGYZSTAN AND TAJIKISTAN
In 2009–2017, economies of Armenia, Belarus, Kyrgyzstan and Tajikistan lived through periods of adverse external and domestic conditions characterized by weak external demand and falling export prices. Devaluation of domestic currencies following the sharp depreciation of the Russian ruble, led to fast growth of public debt in Armenia, Belarus, Kyrgyzstan, and Tajikistan. This growth of debt was also a consequence of fiscal stimulus, which supported budget expenditures, “compensating” for fall in tax revenues due to economic recession. During this period, government debt not only increased, but its structure changed, which created additional risks to debt sustainability. This article analyzes four risk factors for the public debt of these economies. First, the decrease in the share of concessional loans, and, consequent increase of debt service can put pressure on fiscal situation and macroeconomic stability in the medium term. Second, the high level of accumulated debt, in particular, its foreign currency component, limits the “room for maneuvers” for macroeconomic policy in terms of resistance to external shocks. Third, the growth in domestic currency debt, despite the lowering of currency risk, may have a negative impact on the economy in the form of upward inflationary pressure and crowding out of private investment. Fourth, extra-budgetary public support of state enterprises leads to an increase in contingent liabilities and the risk of them being incurred, especially in economies with a significant government role, such as Belarus and Tajikistan
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