Wednesday, 6 October 2010
Armenia set to have a sustained economic development budget in 2011
Minister of Finance Tigran Davtyan told the press conference which was held today at the Press Center of Government that Armenia will enjoy a sustained economic development budget in 2011. Budget receipts will stand at AMD 875bn next year, well above this year’s actual performance. According to the Minister, AMD 650bn will be raised in tax revenue, instead of the current 570 billion. The expenditure side will rise to nearly AMD1 trillion, 63 billion up this year’s indicator, and the deficit will stand at AMD 148.6 billion which is much less than the that of 2010.
“A 6% gap was planned for 2010; however the actual deficit will not exceed the mark of 5 %. The deficit will be maintained within the range of 3-3.5 % next year, which is quite a positive phenomenon. This is the key to economic development,” the Minister of Finance noted adding that the Government will continue endeavoring toward the benchmark gap of 2%. The gap will be covered with both internal and external resources. “External resources will be made up of the proceeds of scheduled borrowings: no further debt will be contracted by the State. Internal resources will be drawn on the domestic reserves,” Tigran Davtjan told the journalists.
In his words, the GDP will go up 8 percent next year. “The taxes-GDP ratio will be 17 % by yearend to keep on improving in 2011 that is we shall reach and, probably, exceed the indicators of the pre-crisis year of 2008,” Tigran Davtyan emphasized.
According to Minister of Finance, as of now Armenia’s external indebtedness stands between 42-44 % of GDP which is not yet risky. “The risky threshold is 50-60 % which was the case with many European countries. It goes without saying that we should be cautious and keep away of it,” the Minister said.
Security and welfare appropriations will make 25 %, with social and cultural spending to stand at 45 % of planned expenditures.
We are in for a higher level of per-sector funding: Ministry of Culture – over 15%; Ministry of Healthcare – extra 9bn drams. Education and science will see a significant increase in allocations. Without going into the details, the Minister said that greater sums will be spent for defense purposes.
Pensions will go up 12% as of this November. AMD 1.6bn will be earmarked for the refund of standing arrears in deposit repayments: more than in the pre-crisis year of 2008. The Nagorno-Karabakh Republic will enjoy higher level of support in 2011.
The teachers’ salaries will see a slight increase as “We plan to raise wages in the under-budgeted spheres, such as culture, education etc.,” Tigran Davtyan noted.
AMD 27bn will be allocated to the disaster zone.
Concerning the expected rise in gas tariffs, the Russian side was said to have not yet clarified the matter. However, the Government stands ready to respond to any scenario. In this connection, the Minister reminded that the State managed to offset the impact of last spring’s price-hike by raising the benefits and pensions.
