ArmInfo.The underfulfillment of capital expenditures of the state budget is a serious problem for the future development of the Armenian economy. The head of the department and entrepreneurship of YSU Karlen Khachatryan stated this in an interview with ArmInfo correspondent.
Earlier, ArmInfo reported that according to the data for the first half of 2019, the state budget expenditures were not met by 17.3% - out of the planned 769.5 billion drams, 636.7 billion drams were spent. Of the capital expenditures provided for the indicated period in the amount of 89.4 billion drams, only 23.5 billion drams were spent. On the whole, of the 220 billion drams capital investments planned for the current year, by the end of July this year only 39 billion drams were spent. By the end of 2019, Armenia will also not "ensure" the deficit indicator set in the Law "On the State Budget of the Republic of Armenia for 2019". The Ministry of Finance is inclined to the fact that according to the situation as of December 31 this year the indicator will be much lower than the fixed figure of 151.6 billion drams and will be about 42.5 billion drams (1.6% / GDP).
According to the economist, it is capital investments in the form of funds allocated for infrastructure development that can become an additional impetus, a resource for stimulating the economy. "This includes the construction of roads and water supply systems, which may become a prerequisite for the progressive development of the relevant sectors of the economy. It turns out, he believes, that the state, refraining from this expense item, which, all other things being equal, could provide certain reserves for economic recovery on the contrary, slows down growth in the future, "he said.
Clarification of deficit expectations, the expert believes, will also be a "disservice" for the Armenian economy. According to Khachatryan, at this economic stage, the state should have implemented a more aggressive policy towards increasing state treasury expenses. "According to my observations, the economy needs additional incentives. After all, we are increasingly talking about low levels of both foreign and domestic investments. It would be possible to somehow fill the gap by increasing government spending, which is not done and is completely unjustified," it.