Gagik Makaryan: Bringing economy out of shadow will lead to GDP growth to $5 bln and budget by $1 bln

ArmInfo. "We are starting from zero", Chairman of the Republican Union of Employers of Armenia, economist Gagik Makaryan stressed at the press conference today assessing the draft budget of 2017 to be implemented under new governmental program.  According to him the draft budget is limited but coupled with the new governmental program it will be managed to solve more problems than before.

"The main items of expenditures have remained the same. One-third of budget is directed to ensuring social protection. This is another evidence that social problems in Armenia remain on the same level, even if some improvements are being registered new problems arise and we can not cut expenditures on this sector", he stressed. At the same time Makaryan informed that according to the draft expenditures on education have slightly increased while those of healthcare and defense have remained on the same level.

However, the expert is concerned over the deficit, which reaches $320 mln. In this light Makaryan considers reasonable to focus more on internal sources, while the draft proposes to cover $162mln of it at the expense of external sources. According to the expert the most efficient method to ensure inflow of funds into the budget is to fight against shadow economy. "Shadow economy has great potential and bringing it out of shadow will ensure growth of budget incomes by $1 bln and GDP growth to up to $5 bln.  This is the best way to redeem state debt, which has already reached 60% of the GDP", he noted. 

To recall, on September 29 the Armenian government approved draft budget for 2017. "Budget for 2017 will be rather tight, Armenia's Prime Minister Karen Karapetyan stated. "The key principle set in the next year's budget is sustainable tax-budget policy and debt stability", the Finance Minister Vardan Aramyan stated presenting the document. According to him during 2014-2015 rather high level of state deficit was registered in Armenia-4.8%. This year the deficit will most likely reach 5.9%, he noted adding that this is the main reason of debt formation. "As the result of this, within two years, in 2014-2015 debt increased from 43.7% to 54.4% by the end of this year", Aramyan stated. Consequently, the Minister noted that in the future more conservative policy should be conducted not to allow further growth of debt.  "Considering this we have been relatively conservative when calculating expenses and the state budget

expenditures are planzed at 1 trillion 360 billion drams, in such case budget deficit in 2017 will be within 2.8%, which is almost two-fold lower than the current year's indicator", the Minister stated. Vardan Aramyan noted that due to administrative mechanisms additional tax revenues are expected next year, as a result revenues will total 1 trillion 210 billion drams.