ANALYSIS OF FACTORS INFLUENCING NET LENDING / NET BORROWING IN THE SYSTEM OF NATIONAL ACCOUNTS OF THE REPUBLIC OF ARMENIA

Abstract

The financial sector accounts have become a key part of the System of National Accounts, providing access to information on financial flows and positions, thus providing an opportunity for a comprehensive analysis of financial stability, in particular, a close examination of the formation and use of net lending/net borrowing.

The article examines the capital and financial accounts reflected in the system of national accounts, in particular, the net lending/net borrowing account. Using correlation and regression analysis, the relationship between net lending/net borrowing and factors of gross external debt positions in the Republic of Armenia for the period 1999-2019 was studied. The estimated parameters of the multiple regression model showed that the factor “direct investment – intercompany loans” has a greater influence on the net lending/net borrowing indicator; if it increases by 1%, then net lending/net borrowing ratio will decrease by 1.2%. It was found that 66.5% of the total variability of the dependent variable "net lending/net borrowing" in the situation under study is explained by the variables included in the model.