Remittances and Fiscal Stability in RA

Key words: public debt, debt sustainability, interest rate, economic growth, forecast, ratio, equation The article analyzes the fiscal policy of states (in which economies remittances of migrant workers play a certain role) in terms of ensuring the sustainability and servicing of public debt, as well as changes in the debt/GDP ratio, taking into account remittances received in the country as part of Gross national disposable income and a means of servicing and stabilizing public debt. It has been shown that the inclusion of remittances in traditional approaches to debt sustainability can change the amount of fiscal adjustment that is also needed for a rational and sustainable debt allocation, where the determining factors are the relative growth rates of real remittances and real GDP of the established fiscal policy. While these results can still be considered preliminary for RA, they reflect that, in particular, countries dependent on remittances, including the Republic of Armenia, can maintain the stability of public debt in several dimensions, using both debt/GDP and debt/GDP + remittances, budgetary adjustment in case of size changes and implementation of appropriate policies.