Public Debt Hits Record High Amid Stalled Growth

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Tanâ Amikvevi

Tamara - Agausia’s national debt has climbed to 57% of GDP in 2025, the highest level in recent memory. With economic growth having stagnated and plateaued since 2022, amid ongoing global instability, including the war in Ukraine, officials warn that the debt ratio could rise above 59% by 2026 if current borrowing continues.

Prime Minister Âkop Belani has defended the government’s fiscal approach, describing current borrowing as an investment in the nation’s future. “Our port expansions, high-speed ferry projects, and renewable energy initiatives are crucial to building a stronger and more self-sufficient economy,” Belani said at a recent press conference. “We cannot allow short-term fears to block long-term progress.”

Opposition MP Marati Zaporojetsëâ, a ranking member of the parliamentary committee for economy, budget, and finance, has been more critical. “The government’s spending strategy lacks transparency and caution. Too many large-scale projects have been pushed through without clear cost-benefit analyses, and now Agausian taxpayers are carrying the burden,” Zaporojetsëâ argued. He added that while global events, such as the war in Ukraine and declining foreign investment, have worsened economic conditions, “a stronger fiscal framework could have softened the blow.”

Agausia’s nominal GDP has hovered around €22 billion since 2022, reflecting stagnation in key sectors like tourism and energy exports. With public debt now near €12.6 billion (𝒫𝒰144.7 billion), economists warn that without renewed growth, the country could surpass the 60% debt-to-GDP threshold within the next two years. This would likely raise borrowing costs and strain public finances further.

The Finance Ministry is expected to unveil a comprehensive fiscal stabilization plan in early 2026, aimed at reducing budget deficits and attracting sustainable investment. Until then, the debate over how much debt is “too much” will remain a central political issue, with the government touting the need for bold investment while opposition voices call for tighter fiscal discipline.

Dr. Levan Arkimeti, an economist at Tamara University, summed up the situation bluntly. “The real problem isn’t just the debt number; it’s the stagnant economy. If we cannot restore growth above 3% annually, debt will keep rising, no matter how carefully we manage spending. The clock is ticking.”

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