Armenian finance minister defends massive bonuses to officials

Armenian Finance Minister Vahe Hovhannisyan said on Wednesday the country’s budget deficit in 2025 will be smaller than expected, easing pressure on public debt, while defending large bonus payments to government officials.

Hovhannisyan told reporters the deficit would be at least one percentage point lower than the planned 5.5%, with debt projected at 48.7% of GDP instead of surpassing 50%. Government debt stood at 48% at the end of 2024, he said.

The minister noted that lower borrowing needs had reduced yields on treasury and foreign currency bonds, adding: “We have historically low risk premiums.”

Addressing criticism over billions of drams in bonuses, Hovhannisyan said civil servants’ base salaries had not risen in recent years, leaving them more vulnerable than private sector employees. He argued that performance-based payments were necessary to retain staff and ensure officials could focus on their work rather than daily social concerns.

The debate has stirred public anger, with critics likening the justification to George Orwell’s Animal Farm, where the pigs systematically establish privileges by arguing they are necessary for the "collective good" or the "greater good" of the farm.