Tuesday, October 19 2010 10:31
Central Bank of Armenia: Forecasts for tax collection and social payments in 2011 may be higher
ArmInfo. The government's forecasts for tax collection and social payments stipulated in the state draft budget 2011 are somewhat low, Chairman of the Central Bank of Armenia Artur Javadyan said at today's hearings on the draft state budget at the National Assembly of Armenia. "The growth of ratio of taxes and social payments against GDP is envisaged at only 0.3%. We think that the growth may be even higher", said Javadyan when presenting the Central Bank's conclusion on the draft state budget.
"The premises of economic recovery were observed at the beginning of the year, which created favorable conditions for tax collection and reduction of the state budget deficit. At the same time, the vivid expansive policy, permanent growth in prices of food commodities and ore products in foreign markets, and on the other hand the unfavorable weather conditions in the country and growth in prices of agricultural products have created an atmosphere of high inflation. Therefore, the fiscal and budgetary policy of the Central Bank was redirected from the anti-crisis to a more balanced one, contributing to no creation of additional inflationary pressure on the one hand, and without hindering the economic growth on the other hand",- said Javadyan.
Overfulfilment in tax collection accompanied by certain economy in expenditures contributed to considerable decline of budget deficit. According to preliminary data, over Jan-Aug the deficit index was 37.6% of the annual target. As regards the sources of budget deficit financing, the placement of government securities helped ensure 12.3 bln AMD over Jan-Aug despite the tense situation in early 2010.
The impact of the fiscal and budget sector on the gross demand was less expansive than the targeted one. As regards the annual trends, if the annual budget indices are fulfilled, at the end of the year the fiscal and budget stimulus is estimated at expansive 2.6% against the 7.9% in 2009. "It should be noted that alongside with the governmental policy on deficit reduction, the Central Bank was constantly raising the strictness of monetary and credit conditions: over the first half- year the refinance rate was raised by 2.25%",- said Javadyan.
Thanks to this, in June the 12-month inflation made up only 5.8%. The further restraining actions were complicated by the growth in prices of agricultural products, difficulties in the foreign market of grain and other factors. However, the CBA chairman said that in case of coordinated regulation, in 2011 inflation may be maintained at 4 1,5%.
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