ArmInfo. Budget for 2017 will be rather tight, Armenia's Prime Minister Karen Karapetyan stated after Finance Minister Vardan Aramyan presented draft budget 2017 today, which has been adopted by the government.
"The key principle set in the next year's budget is sustainable tax-budget policy and debt stability", the Finance Minister 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 planned 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 noting that budget expenditures will total about 1 trillion 444 billion drams at the year end 2016.
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.
"We plan rather tough budget in 2017, the numbers testify to this. We plan to ensure growth of revenues approximately by 70 bln drams and reduction of expenditures by nearly 100 bln drams. All the voiced issues related to management, reduction of expenses are very urgent", Prime Minister Karen Karapetyan stated.
After the session the Finance Minister presented more details of the draft budget to journalists.
According to him, economic growth in Armenia in year-end 2017 is forecasted 3.2%, amid deflator index 1.7%. The Minister noted that the growth is moderate but everything should be considered in comparison, particularly, this year most likely economic growth will be around 2.4%. Economy growth will be ensured due to a number of fields, particularly 5% growth is expected in industrial field, 4%-in agriculture, no growth is expected in construction sector in 2017 and around 2% growth is expected in services.
Aramyan stated that the inflation is planned within 4% (+-1.5%) and stressed that the Ministry will coordinate its policy with the CBA in order to ensure macroeconomic stability.
To note, according to the data of the National Statistical Service of Armenia economic growth in Armenia in Q2 2016 totaled 1.5% compared to 4.5% registered in the first three months of the year. According to Armenia's state budget for 2016 expenditures total 1 trillion 377 billion drams (expenditures/GDP correlation 25.3%), and revenues-1 trillion 186.3 billion drams (revenue/GDP correlation 21.8%) amid 197 bln drams deficit (deficit/GDP correlation 3.5%). Inflation in Armenia in 2016 is planned at the level of 4% (+-1.5%) and GDP growth-2.2%.