Footnote:
In: EDB Macroreview, August 2018
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 27, 2018 erstellt
Description:
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 article analyzes potential risk factors for the debt sustainability of these economies to which the authors refer the decrease in the share of concessional loans and increase of debt service, the high level of accumulated debt, the growth in domestic currency debt, extra-budgetary public support of state enterprises.Analysis of the public debt of Armenia, Belarus, Kyrgyzstan and Tajikistan in 2009 2017 has identified a number of problems that may have certain negative consequences for debt sustainability and the economy. In particular, it is necessary to pay attention to the following aspects of debt dynamics and structure. Firstly, increasing debt, especially short-term and medium-term borrowings, is accompanied by a rise in the cost of its service, and increases the risk of default due to mounting financing needs. Secondly, a high level of public debt reduces the scope for fiscal maneuvers, which makes it difficult to carry out countercyclical macroeconomic policies. Thirdly, the growth of domestic borrowing can have negative consequences in the form of inflation, higher devaluation expectations and the crowding out of private investments. Fourthly, in the midst of significant contingent liabilities of state enterprises’ debts, the government may face the risk of default in case of a sudden shock and a deteriorating financial condition of state-owned enterprises