ArmInfo. Capital expenditures of the state budget of Armenia in 2018 are planned to increase by 73.8 billion drams, which will be directed to road construction, irrigation system and energy. "No sensible investor will invest money in the Armenian economy if we do not have normal roads," Armenian Minister of Finance Vardan Aramyan told ArmInfo reporter on October 22 during a seminar on "The State Budget for 2018" organized with the assistance of the German Society for International Cooperation (GIZ). Note that in 2018 the investment-to-GDP ratio promises to just return to the indicators of 2016 - 18.4% of GDP, instead of 18.2% expected by the end of this year.
The nominal GDP of Armenia in 2018, according to the draft budget for the next year, will grow by 441 billion - from the expected by the end of 2017 5,409.1 billion to the projected 5.850.7 billion drams. Economic growth in 2018 is planned at 4.5% or $ 11.948.9 million. Forecasts of economic growth for the next year are largely due to the outlined positive dynamics this year, as a result of which the Ministry of Finance raised forecasts for economic growth in 2017 from the planned 3, 2% to 4.3%. The Minister of Finance recalls that, according to the results of the first half of the year, economic growth in Armenia was about 6%, which is significant enough for the formation of positive expectations in the future. In the matter of ensuring economic growth, one of the locomotives is promised by industry and the services sector. So, 4.5% of GDP will be provided at the expense of industry 1.1%, agriculture - 0.6%, services - 2.2%, net indirect taxes - 0.4%. 12-month inflation by the end of 2018 will be 4%, instead of expected in 2017, 2.4% and actual -1.1% at the end of 2016. Exports will reach 37.4% of GDP, against the projected in 2017 37% and 33.1% in 2016.
Expectations, as before, are supported by positive signals that the republic receives from outside. Traditionally, such are the expectations of the restoration of the Russian economy, confirmed by international authoritative structures that the Russian economy has emerged from the recession and returned to a moderate growth rate in 2017. In addition, the dynamics of the copper and oil market are also encouraging.
According to the Minister, the consolidated budget of Armenia for the year 2018 in terms of revenues will make 1.307.3 billion drams (without the receipt of interbudgetary transfers). Taxes will grow by 112 bln drams - according to the results of the year, the current income is expected at the level of 1,210 trillion drams, and by the end of the last year the revenues amounted to 1.135.9 billion drams. Of which, in 2018, taxes will amount to 1.247.9 billion drams or 21.3% of the runway, against 21.2% in the current year (1135.0 billion drams) and 21.3% in 2016 or 1076.9 billion drams (adjusted taxes / GDP will be 21.3% instead of 20.9% by the end of 2017 and actual 20.3% last year). Next year, as explained in the Ministry of Finance, the state treasury will receive less than 395 billion drams due to business payments for VAT, income tax and profit tax.
The deficit / GDP will be 2.7%, instead of the forecasted 3.2% by the end of this year. and 5.5% in the end of 2016 - 156.9 billion drams, 150.1 billion and 284.7 billion drams, respectively. Of these, AMD 77.1 billion will be financed from domestic resources, including an increase in domestic debt. Despite the high cost of domestic debt, Vardan Aramyan explained, the funds will go into the pockets of Armenian residents, turning into a multiplier effect in the country's economy. 79.8 billion drams or $ 166 million will be attracted from outside.
According to the spending line, it is expected to be 1.464.2 billion drams (1.360.1 billion in 2017 and 1.420.6 billion in 2016), of which capital expenditures will make up 172.4 billion drams instead of last year's 98.6 billion drams and 160 billion in 2016 year. Capital expenditures will be mainly implemented through external borrowing and invested in road construction, irrigation systems and the energy sector of the country. By the end of 2018, the state debt, compared with the current year, will grow another $ 300 million - to over $ 7 billion and account for 60% of GDP.