Economist: Revenue item is a weak side of draft budget 2016

ArmInfo. The draft budget of 2016 is much more unpretentious than the current budget. This means that the government is experiencing difficulties with the revenue item of the basic financial document, economist Vardan Bostanjyan said at today's press conference in Yerevan.   

He said FY 2015 proved to be hard for Armenia because of the "investment hunger". Both foreign and local entrepreneurs do not want to invest in Armenia's economy. He added, though, that despite many problems, there will be no budget cuts. "But I do not think the forecasts about the 3-4% economic growth and the inflation will prove true," he said. 

Bostanjyan thinks that Armenia has chances to improve the situation through economic cooperation with Iran, the Eurasian Economic Union and the European Union. "The EEU is a market of 170 million consumers, but it is a puzzle-headed market and it is necessary to elaborate a strategy of effective activities on it," he said. In the case of Iran and the EU, the economist also stresses the need for certain approaches.        

To recall, on October 1, the Armenian Government approved the draft budget of 2016.  According to the draft budget, the real GDP growth for 2016 will be 2.2%, GDP deflator-index - 4%, 12-month inflation - 4% (+1.5%), budget deficit - 3.5% of GDP. The expenditures will make up 1 trillion 373.7 billion AMD, revenues - 1 trillion 183 billion AMD, and the deficit - 197 billion AMD ($1 - 472.37 AMD). According to the World Bank, the GDP growth in Armenia in 2016 will be 2.7%, and in 2017 - 3%.

To note, according to the National Statistical Service of Armenia, in the first half of 2015 the budget revenues amounted to 553.8 bln AMD (0.4% growth), expenditures - 605.9 bln AMD (16% growth), and the deficit totaled 52 billion AMD.