National Statistics: Budget deficit growth rates slacken to 42.5% for 1st half of 2016 after dramatic rise a year ago

ArmInfo. Budget deficit in Armenia totaled 85.8bln drams ($177.4mln) for the 1st half of 2016, after growing 42.5% year over year versus 7.5-fold slackening a year ago - from surplus to deficit. According to the National Statistical Service of Armenia, the budget revenues grew 0.9% y-o-y (versus 0.4% previous growth) to 539.5bln drams, amid 5.1% y-o-y growth of expenditures (versus 14.1% previous growth) to 625.4bln drams. 

As regards the monthly dynamics, in Jan 2016 the budget surplus totaled 21.3 bln AMD and in Feb 2016 the budget deficit was 35.3 bln AMD. In March the deficit declined to 23.8 bln, in April it grew to 26.5 bln AMD, in May it dropped to 10.8 bln AMD, amid 12% decline in revenues in June and 0.8% growth in expenditures (to 98.1 bln AMD and 107.6 bln AMD, respectively). 

Taxes and duties accounted for 95% of revenues (vs 93.8% in the first half of 2015), increasing 2.2% in absolute terms to 512.6bln drams (vs 0.3% growth a year ago). In particular, the revenues from customs duties dropped by 16.19% to 25.3 bln AMD, those from VAT fell by 7.9% to 177.4 bln AMD, the shortfall in income taxes made up 41.1 mln AMD (versus negative 93.2 mln AMD a year before), fixed payments fell by 3.9% to 1.5bln drams. 

The revenues from turnover tax grew by 32.4% to 6.9 bln AMD, target social payments - by 22.9% to 6.1 bln AMD, excise tax - by 19.1% to 25.1 bln AMD, profit tax - by 19.1% to 71.2 bln AMD, mandatory social security payments fell by 16.6% to 4.1bln drams. In the meantime, the revenues from income taxes increased moderately by 7.8% to 155.6 bln AMD, payments for usages of natural resources and environment protection increased 3.1% to 13.6bln drams. Revenues from state duties increased by 1.9% to 15.4 bln AMD.

The expenditures in all items saw high growth rates, except for the expenditures on purchase of commodities and services, which fell by 36.6% to 68.9 bln AMD, and expenditures related to non-financial assets, which dropped by 14.7% to 15.7 bln AMD.

In the first half of 2016, expenditures on subsidies increased 4.4-fold to 54.2 bln AMD and the interest payments for the state debt - by 33.5% to 44.5 bln AMD, with 26.7 bln AMD of this amount being the interest payments for the foreign debt with a 57.9% year over year. In the structure of expenditures, 76.2 bln AMD was allocated for grants (up 13.5% y-o-y), 196.3bln AMD - for allowances and pensions (up 3.2%), 60.8bln AMD - for salaries (up 3.2%).