ArmInfo. In 2014-2015 transfers to Armenia dropped by $700 mln, by the forecast they will drop by $140 mln in 2016, Armenia's Finance Minister Vardan Aramyan stated at the first press conference on October 4.
According to the Minister if the government had not taken preventive steps negative economic dynamics would be registered in Armenia. "Tax budget policy of the government during the recent years was counter cyclical, this means the government had to make high expenses, which has led to deficit. More funds were injected in the economy for compensating reduction of transfers to Armenia", Aramyan explained.
This manipulation according to the Minister led to 4.8% budget deficit in 2015. Increasing the budget deficit Armenia increased amount of foreign debt. As a result according to Aramyan the country's foreign debt in 2014, 2015 and 2016 grew by nearly $900 mln. "In other case, sharp devaluation of national currency and low economic growth would be registered in Armenia", the Minister summarized.
To note, according to the Finance Ministry within the two years in 2014-2015 the state debt increased from 43.7% and will total 54.4% by the end of the year.
According to the National Statistical Service of Armenia economic growth in Armenia in the Q2 2016 totaled 1.5% versus 4.5% registered in the first three months of the year. In the budget for 2016, expenses total 1 trillion 377 billion drams (25.3% expenses/GDP ratio) revenues- 1 trillion 186.3 billion drams (21.8% revenue/GDP ratio), and deficit - 197 billion drams (3.5% deficit/GDP ratio). GDP growth in the budget is projected at 2.2%, inflation at 4% (+1.5%).
