Thursday, November 30 2017 15:17
Naira Badalian

2018 budget draft adjustments: Armenia is going to increase expenditure items of the budget

2018 budget draft adjustments: Armenia is going to increase expenditure   items of the budget

ArmInfo. Expenses of the state  treasury of Armenia in 2018 as a result of discussions in the  standing commissions of the National Assembly increased by 15 billion  drams.  This November 30, presenting an adjusted version of the draft  budget for the next year, during the government meeting, Armenian  Minister of Finance Vardan Aramyan

According to the Minister, the budget expenditures from the  previously planned 1, 464.2 billion drams (1.360.1 billion in 2017  and 1.420.6 billion in 2016) will grow to 1, 465.2 billion drams. As  Aramyan explained, according to the RA Law on Budget System, a  financial document for the next year is submitted to the country's  parliament, where the expenses are calculated on the basis of the  exchange rate as of September 1. Later, changes in the exchange rate  of the currency require certain adjustments. In this case, as the  head of the Ministry of Finance pointed out, changes in the exchange  rate of almost 5 drams led to an increase in revenues by 1.5 billion  drams.

In addition, the expenditure part of the draft budget grew by 4  billion drams, which was due to the increase in financing of the  healthcare system of Armenia - from 72.6 billion drams, planned by  the previous text of the document, to 76.6 billion drams.  The State  Water Committee of Armenia also expects an increase in financing in  the amount of 1 billion 289 million drams to cover the costs  associated with the rise in price of the water tariff in the amount  of 11.4 drams per cubic meter (including VAT).  Meanwhile, on  November 22, on the day of approval of Veolia Djur's application for  increasing the water tariff, the head of the water supply and  drainage department of the State Water Management Committee of  Armenia Armen Sergoyan said that the difference of 11.4 drams will be  compensated by rent of a single operator to the state budget of the  country. A few days ago, ArmInfo was told by the Committee that a  document was being prepared under which the difference would be  subsidized from the reserve fund of the Government and would not  become an additional burden for the state budget of the country. "We  will try to find a more targeted solution to this issue in 2019,"  Aramyan said.

Pursuant to the requirements of the new Constitution, the  expenditures of the Government Office will be allocated 1.7 billion  drams more than the previous version of the draft budget. At the same  time, the expenditures of the government's reserve fund will be  increased by 3.9 billion drams from 21.1 billion drams earlier laid  down to 25 billion drams, which is due to planned activities and,  possibly, unplanned expenses for them. About 1bln AMD are planned to  be allocated for ensuring border security and implementation of  Armenia's obligations in the framework of international agreements.

According to the head of the Ministry of Finance, on the part of  parliamentarians, proposals were made to increase expenditure items  in a number of spheres and directions, or at least to maintain the  indicators of 2017. The Ministry of Finance plans to consider the  proposals within the framework of the medium-term expenditure program  for 2018-2021. According to some proposals, despite their relevance,  the Ministry of Finance was forced to pass a negative conclusion, as  Vardan Aramyan noted that as a result, Armenia could go beyond the  threshold set by the country's fiscal legislation.

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  the year 2018 in terms of revenues, according to the results of  parliamentary adjustments, will make 1.308.2bln AMD, instead of  1.307.3bln drams announced earlier (without receipt of interbudgetary  transfers). The deficit / GDP instead of 156.8bln AMD in the previous  text of the document will make 156.9bln AMD. Capital expenditures  will make 158.7bln AMD, instead of 172.4bln AMD (160bn in 2016)  earlier planned, current expenses from 1.391.8bln AMD will grow to  1.306.5bln AMD. By the end of 2018, the national debt, with $ 6.8bln  of AMD expected by the end of this year, will grow to over $ 7.2  billion and make up 60% of GDP.

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