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By Atom Markarian

International lenders meeting in London to discuss the economic situation in the seven poorest ex-Soviet states are not considering cutting or restructuring Armenia’s external debt, the head of the Armenian Central Bank (HKB) said on Friday.

Tigran Sarkisian, who is taking part in the International Monetary Fund/World Bank meeting, told RFE/RL from London that Armenia is “in a much better shape” than countries like Georgia, Kyrgyzstan or Tajikistan in terms of its ability to meet debt repayments.

Reuters news agency reported earlier this week that some of the seven countries, which also include Moldova, Turkmenistan and Azerbaijan, could join the Heavily Indebted Poor Countries debt scheme according to proposals from the World Bank and IMF.

But Sarkisian, speaking on the second of day of the meeting, insisted that the lenders are not discussing debt relief for any of the mentioned states. “This is not being discussed here. We are only talking about restructuring the debts so that these countries can service them on time,” he said. Armenia is not being considered for debt restructuring either, he added.

Armenia’s total external debt currently stands at $904.5 million or 43 percent of its Gross Domestic Product. That ratio is higher in most of the other ex-Soviet republics.

"The impact of the debt on the budget remains a matter of concern in all countries except possibly Armenia, and some debt flow rescheduling may be required if social expenditures are not to be squeezed," the IMF and the World Bank said in a report prepared for the meeting.

Officials from both institutions have said previously that Armenia can not yet be considered heavily indebted. But their joint report cautions that Yerevan’s debt is in excess of 150 percent of exports, an economically unsustainable level.

According to Sarkisian, the discussions centered on ways of safeguarding the seven countries against future financial risks. No decisions were announced as of Friday afternoon.
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