The Armenian government announced on Thursday that it will receive almost $146 million in fresh foreign loans soon to finance about half of its budget deficit projected for this year.

The government formally approved lending agreements with Germany’s state development bank KfW and the Asian Development Bank (ADB) at a weekly session chaired by Prime Minister Nikol Pashinian. It said KfW will lend it 40 million euros ($44 million) while the Manila-based ABD will provide two other “budgetary support loans” worth a combined 45.6 million euros.

According to Deputy Finance Minister Karen Brutian, the cabinet will approve next week a similar agreement with the World Bank to secure a 45.8 million-euro loan before the end of this year.

“All these funds will be channeled into financing the budget deficit envisaged by the state budget: namely, financing budgetary expenditures,” Brutian told cabinet members.

Armenia’s 2019 fiscal deficit is projected at roughly 150 billion drams ($316 million), a sum equivalent to around 2.5 percent of GDP.

Armenia was even more dependent on external budgetary loans in the 1990s and early 2000s. Such low-interest loans make up a large part of the country’s public debt which totaled $6.54 billion as of September 30.

Brutian said the debt will reach $6.94 billion, or 50.3 percent of GDP, at the end of this year. The debt-to-GDP ratio stood at 51.3 percent last year, stressed the official.

Pashinian welcomed the decreased relative debt burden, saying that his government has room for more borrowing that could potentially finance “mega projects” considered by it. He shed no light on those projects.

Pashinian already mentioned the “mega projects” relating to the construction of roads, water reservoirs and other public infrastructure after visiting Brussels in March. He said the European Union is ready to co-finance them with the Armenian government. The government may have to seek more foreign loans for that purpose, he said.

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