Tuesday, November 5 2019 12:42

ArmInfo. The long-term task of the RA government is to transfer Armenia to the category of states with high income. On November 5, Minister of Finance of the  Republic of Armenia Atom Dzhandzhugazyan announced this at a hearing  in a permanent parliamentary commission on financial-credit and  budgetary issues, presenting the adjusted draft state budget for  2020.

Note that according to the World Bank classification, high-income  countries are countries in which the nominal GDP per capita exceeds $  12056. According to the results of 2019, this indicator in Armenia is  expected to reach $ 4604 against $ 4280 in 2018.

As Atom Dzhandzhugazyan noted, one of the most important directions  for the success of the monetary policy of the state is reforming tax  legislation, according to which the tax burden of direct taxes is  reduced and indirect taxes are slightly increased.

According to the Minister, these reforms will not take long. He also  emphasized the importance of implementing long-term development  programs in terms of increasing budget allocations for capital  expenditures. In 2020, these volumes will exceed the volumes of 2019  by 170 billion drams. The goal of all these events is to create  favorable conditions for creating new values.

Investments in the development of human capital, in particular, in  education, science, culture, sports, labor, social services and  healthcare, will undergo major changes. Thus, budget allocations for  the healthcare sector in 2020 will increase by 22% compared to the  current year, and for education, science, culture, sports, labor and  social services by 11%.

Along with the growth of the economy, the head of the Ministry of  Finance continued, an improvement in the situation with public debt  management is forecasted. It is envisaged, in particular, to reduce  the public debt in the country's GDP to below 50% by the end of 2020.  At the same time, by the end of 2019, this level will be reduced from  51% to 50%.

One of the features of the draft state budget for 2020 will be the  attraction of credit resources exclusively within the framework of  program budgeting, in particular, to finance the state budget deficit  and reduce it.  Credit resources are planned, as before, to be  attracted so far on favorable terms. Armenia, according to the  minister, is one of the states with an average level of debt burden,  and the government's task is to transfer the country to the category  of high-income countries, which, in turn, will lead to the refusal to  attract new loans. Recent developments, the minister continued,  especially given the refinancing of public debt through a third  placement in September of this year. Eurobonds allow you to safely  overcome the consequences of similar placements in 2013. As a result,  the minister continued, the public debt risk assessment has changed.  All these measures, as noted by the Minister of Finance, have led to  the possibility of increasing salaries and pensions since 2020.

He also emphasized that according to the adjusted draft, the state  budget revenues of Armenia in 2020 will amount to 1.658 trillion  drams, expenditure - 1.850 trillion, deficit - 183.6 billion drams.   On the eve of the parliamentary discussions of the draft law "On the  state budget for 2020" Atom Dzhadzhugazyan noted that state tax  revenues (tax revenues and state duty) in 2020 are projected at 1  trillion 602 billion 130 million (94.4% of the projected budget  revenues) instead of 1 trillion 401 billion 876 million drams  budgeted for 2019. According to the Minister of Finance, this  indicator is approximately 138 billion drams higher than the adjusted  figure for the current year in the amount of 1 trillion 464 billion  drams. According to the minister, if the adjusted forecast for tax  revenues of the state treasury for 2019 is 22.3% of the projected  GDP, then, as expected by the country's financial authorities, in  2020 the share of tax revenues of the state treasury will increase by  0.3 percentage points compared to the current year. - up to 22.6%.  Moreover, compared with the actual result for 2018 (1 trillion 258  billion drams or 20.9% of GDP), the expected growth in 2019 will  already grow by 1.4% or 206 billion drams. In planning tax revenues,  the state treasury, as the head of the Ministry of Finance pointed  out, the financial authorities of the country were guided by the  expected growth in Armenia's nominal GDP in 2020. The indicator,  according to the draft budget for next year, will grow by  approximately 529 billion drams - from the expected by the end of  2019 6 trillion 567 billion drams to 7 trillion 095 billion drams  included in the document. As expected, the real GDP index will reach  104.9%, against the forecasted by the end of the current year of  106.3% and the actual for 2018 of 105.2%. The GDP deflator in 2020  will be 103%, against 102.9% for 2019 and the actual 102.5% for 2018.  In addition, the financial authorities also took into account the  possible impact of tax changes that will come into force in 2020,  additional revenues expected from the results of tax administration,  and the so-called "tax expenses" - tax benefits and lost revenue in  the amount of 457 billion drams or 6.45 % of projected GDP. In the  absence of such benefits, as the Minister pointed out, in 2020  Armenia could collect taxes for 2 trillion 059 billion drams or 29%  of GDP. As a result, state treasury revenues are planned at the level  of 44.6 billion drams, against 39.4 billion drams approved for 2019  and actual 37.7 billion drams for 2018. In 2020, according to the  draft budget, Armenia expects to receive from foreign states and  international organizations official grants in the amount of 33.8  billion drams, instead of 31 billion drams provided for by the  Medium-Term Expenditure Program (MSS).  This, according to the  authors of the document, is due to both adjustments to the size and  volume of the proposed amounts, and changes in calculations due to  fluctuations in the euro and the US dollar, which were the basis for  the calculation. In particular, the basis for the calculations of the  SSR was the indicator of 486.42 and 546.54 drams per dollar and euro,  respectively, and the project already made calculations based on the  following rates - 476.17 and 522.03 drams.

In 2020, Armenia expects to receive 7.6 billion drams or 14.5 million  euros within the framework of the European Neighborhood Program for  budget assistance programs provided for by the Armenia-EU Action  Program. 55.1 million US dollars or 26.2 billion drams are expected  under the targeted grant programs. Of these, $ 10.7 million or 5.1  billion drams will be received from Russia, from the EU grants in the  amount of $ 13.1 million or 6.2 billion drams, $ 7.1 million or 3.3  billion is expected to be received from KFW under grant programs  drams, $ 2.4 million or 1.2 billion drams will be received from the  Global Fund, $ 8.1 million or 3.8 billion drams are expected from the  European Bank for Reconstruction and Development, $ 1.9 million or  0.9 billion drams from the European Investment Bank for  implementation of the North-South transport corridor program  (tranche-3), the World Bank will provide grants in the amount of $  2.8 million or 1.3 billion drams and another $ 9 million or 4.4 ml  etc. AMD is expected from other donors. Armenia plans to receive 61.7  billion drams from other incomes in 2020, 30.6 billion drams from  them through extrabudgetary programs, against 55.1 billion drams for  the current year and 72.4 billion drams for 2018.