The Central Bank of Armenia updated the forecast for the state budget deficit for 2017 - 3.3% of GDP

ArmInfo. According to the updated forecast of the Central Bank of Armenia, the budget deficit in 2017 will reach 3.3% of GDP, against the forecasted 2.2% of GDP in August and 5.6% in 2016. This is noted in the updated (in late November) monetary program of the Central Bank of Armenia. 

The ratio of taxes to GDP, according to the forecasts of the Central Bank, will be 21.2% in 2017, which is slightly lower than the previous forecast (22.2%). The ratio of state budget expenditures to GDP of the Central Bank in 2017 expects at the level of 25.6% (against the previously projected 25.8%), which is 2.3% percentage points lower than the last year. As a result of 2017, the state expenditures are expected to be saved by almost 45 billion drams, mainly for capital expenditures due to external financing.

Against the backdrop of revised GDP projections to accelerate growth, the impact of fiscal policy on gross demand in 2017 is estimated to be 2.9 percentage points constraining, which is 1.1 percentage points lower than the previous forecast. In the medium term, to stabilize the debt, fiscal policy will be aimed at a gradual reduction of the deficit - an average of 2.4% of GDP. And despite the deficit reduction, in 2018 the impact of fiscal policy on gross demand will be increased by 0.8 percentage points, and in 2019-2020 it is expected to neutralize the impact of fiscal policy. The current account deficit is projected in 2017 in the range of 2- 3% of GDP.

According to the National Statistical Service of Armenia, in 2016 the deficit of the state budget amounted to 272.5 billion AMD with an increase of 11.2%. Incomes of the state budget grew by 0.7% in 2016 to 1.2 trillion AMD, while expenditures grew by 2.6% to 1.4 trillion AMD. Armenia's GDP increased by 0.2% in 2016 to 5.068 trillion AMD ($ 10.5 billion), against growth of 3.2% in 2015. The GDP deflator index in 2016 was 100.5%, against 101.2% in 2015.

According to statistical data, in Jan-Oct 2017 the deficit of the state budget of Armenia decreased by 32.3% per annum - to 127 billion drams. The revenues of the state budget increased by 5.5% per annum to 994.1 bln AMD, with a 1% drop in expenses to 1.121 trillion.