Minister: The main task of next year will be stabilization of the share of public debt in Armenia`s GDP

ArmInfo.  In 2018, the  profitable part of the state budget of Armenia is planned at the  level of 1.307.3 trillion drams, the expenditure part - 1.464.2  trillion drams, the budget deficit will make 156.9 billion drams. The  RA Minister of Finance Vardan Aramyan stated this at the plenary  session of the RA National Assembly on November 15 presenting the  bill "On the State Budget of 2018".

As noted by the country's chief financier, one of the main tasks of  the government next year will be stabilization of the share of public  debt in the country's GDP. According to the draft budget for 2018,  the revenues of the state budget will amount to tax revenues of  1.247.9 billion drams, of which about 70 billion drams will be  provided by the effect of economic growth, which is planned at 3.2%.  Another 30 billion drams will come from improving the quality of  administration. Adjusted taxes / GDP in 2018 will be 21.3% instead of  20.9% by the end of 2017 and actual 20.3% last year. Next year, the  state treasury will receive less than 395 billion drams due to  payments to businesses through VAT, income tax and profit tax.   Nevertheless, according to the results of improving the tax  administration, it is expected to collect taxes in the amount of 30.8  billion drams.

In 2018, international structures and foreign countries are expected  to attract official grants of 35.6 billion drams. In 2017, the  expected figure was 30.9 billion drams, and in 2016 their actual  volume was 28.4 billion drams. Other budget revenues will make up  23.8 billion drams next year, in 2017 they are expected at 44.1  billion drams, and in 2016 they made 30.6 billion drams.

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. In addition, as the country's chief financier pointed out,  the build-up of domestic debt does not pose a threat to the  republic's financial system.

Despite ambitious investment statements, 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. As explained by the Minister of Finance, investments are  traditionally not immediately transformed into economic growth of the  country. There are also such, such as investments in the construction  of apartment buildings, find a positive response to the GDP of the  country this year. In addition, the investor traditionally expects  specific actions and improvements in the investment climate, and then  only reacts. Prior to this, the local government should react to the  positive steps of the government - local investors. "Various studies  show that a positive impulse and an adequate reaction from the local  investor is transformed into a result within 1.5-2 years, and  positive changes on the part of the external investor require a  longer period of time," the minister explained.

Note that the nominal GDP of Armenia in 2018, according to the draft  budget for the next year, will grow by 441 billion - from 5,409.1  billion expected by the end of 2017 to 5,850.7 billion drams pledged  in the project. The economic growth in 2018 is planned at 4.5% or $  11.948.9 million. The 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 the forecasts for  economic growth in 2017 from the planned 3, 2% to 4.3%. 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. The consolidated budget of Armenia for  2018 in terms of revenues will make 1.307.3 billion drams (without  the receipt of interbudgetary transfers). 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. 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 carried  out at the expense of external.